Report Summary. Malegam Committee on Microfinance. (January ). Background. The Board of Directors of the Reserve Bank of India. (RBI) constituted a. PDF | On Nov 7, , Saswat Barpanda and others published The Malegam Committee Microfinance Report: Will the MFIs Accept It?. Malegam Committee Report on MFI – Download as PDF File .pdf), Text File .txt) or read online.
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Malegam Committee Report on Microfinance: What’s On The Platter?
The much-awaited Malegam committee report is laudable because it is the 1st committee report of some significance to attempt the creation on of a national regulatory framework for Microfinance in India. The Malegam committee report must be strongly appreciated committde it seeks to legitimize microfinance as an integral part of the Indian financial sector.
By recommending creation of a new category — called NBFC MFIs with associated conditions which are perhaps open for discussion — the report has clearly positioned and mainstreamed micro-finance within the framework of the larger financial sector in India.
This ensures that micro-finance will come under the purview of the RBI and no longer can microfinance be treated as a fringe activity or as an orphaned child in the larger Indian financial sector. A second aspect that deserves appreciation is the fact that while the report has recommended continuation of priority sector funds for MFIs, it was however made it conditional — especially after recognizing some of the key problems like ghost lending, multiple lending, over lending and attempting to outline some measure to tackle them onn well.
A third issue that merits appreciation is the fact that the report has sought to promote greater transparency with regard to interest rates…through various measures.
Fourth, the report has recognized and stressed the importance of off-site and on-site supervision of NBFC MFIs including systemically important ones while also alluding to the need for significantly enhancing the supervisory capacity of RBI with regard to micro-finance. Fifth, the strong emphasis on committeee governance is note worthy and specifically, the committee has suggested that corporate governance rules will have to be specified encompassing several issues for NBFC MFIs by the regulator.
A very critical aspect indeed….
That said, I am therefore a bit perplexed by the strong initial criticisms of the Malegam report…While stakeholders appear to have perceived several weaknesses in the report, I try to list some of these below and provide some explanations with regard to these issues, apart from suggesting ways forward.
Many of these issues can easily be addressed by dialogue and discussion and do not take away the excellent work done by Malegam committee — that is a point that I would like to make clear upfront…. Read on at Microfinance in India Blog.
Malegam Committee Report – Summary of Key Recommendations
Malegam Committee on Microfinance leaves us with more questions than answers. How to earn Rs in 10 Minutes. Instant Payday Loans Within 24 Malega. Work from home without Investment.
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