presentation on micro finance institutions (development & regulation) bill, 2012 by m r umarji
DESCRIPTION
Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji. Basic Issue involved. If MFIs are money-lenders how can Parliament make the proposed law?. Answers. - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/1.jpg)
Presentation on Micro Finance Institutions
(Development & Regulation) Bill, 2012
by M R Umarji
![Page 2: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/2.jpg)
Basic Issue involved
• If MFIs are money-lenders how can Parliament make the proposed law?
![Page 3: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/3.jpg)
Answers
• PRE-AMBLE of the Bill refers to MFIs as entities providing credit, thrift and other micro finance services
• Definition of Micro Finance Services also includes above services in addition to remittance of funds and pension and insurance services.
• Money lenders do not provide above services and hence MFIs are different and not money lenders.
![Page 4: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/4.jpg)
Scheme of RBI for lending to MFIs
• RBI has formulated a scheme for lending by banks to MFIs for on- lending to SHGs
• Total amount disbursed by Banks to MFIs
• ₹ 7605 crores during 2010-11
• There are no such schemes for money-lenders
![Page 5: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/5.jpg)
Regulation of NBFCs engaged in Micro Finance
Business• If a Company is engaged in Micro Finance
Business it has to obtain registration from RBI under the RBI Act, 1934.
• Such Micro Finance Companies are regulated by RBI under a Central Law on the basis that activity of lending and providing other financial services is similar to ‘Banking’.
• On the same basis non-corporate entities providing financial services are treated as NON-BANKS and are to be regulated by RBI under the new law.
![Page 6: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/6.jpg)
Other Concerns
.Unfair debt recovery practices
Overindebtedness
Provision made in the Bill.
• RBI to have wide powers including specifying lending rates, margins, amount of loan, place of disbursement, recovery practices, etc.
• State Level Advisory Councils.
• District Advisories committee
![Page 7: Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji](https://reader035.vdocument.in/reader035/viewer/2022071807/56812ae0550346895d8ec983/html5/thumbnails/7.jpg)
THANK YOU