Need for establishing an apex Micro Financial Institution to provide uniform guidelines & regulation of microfinance sector- Assocham

December 01, 2010: Assocham has stressed the need for establishing an apex Micro Financial Institution to provide uniform guidelines, regulate and ensure good corporate governance standards for fair and equitable dispensation to all stake holders.

The Government must clearly define the policy regarding expanding branch network and business correspondent modal so that more and more Un-banked areas are covered for attending full Financial Inclusion. Each commercial bank should be assigned a specified area for speeding full financial inclusion. This should be a time bound exercise.

The microfinance sector needs to be regulated to enforce transparency and fair play so that the ultimate objective of providing small ticket size loans to the rural populations at affordable interest rate of interest. This will bring healthy competition among the players and bring down transaction cost for the loan beneficiaries.

The share of total bank credit to micro sector may be increased and strict follow up and monitoring mechanism be placed for effective control. The interest may be subsidized in lieu of extending pure subsidy.

A special set of corporate governance norms be identified for microfinance institutions, so that their healthy growth and interest is widely accepted.

Banknet's 7th Annual Conference on Payment Systems will be organized on 19th January 2011 at Mumbai Plenary session will give an insight into emerging applications and approaches, Holistic view of the latest developments in the retail payments industry, Supporting financial inclusion measures etc. Banknet's Annual Conference on Payments is the largest payments event in India and has on average attracted around 300 senior executives. .... Read More

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