The Reserve Bank of India will hereafter regulate the activities of micro finance intuitions (MFIs). The cabinet has nodded for the bill. Micro Financial Sector Development and Regulation Bill, 2011. The Bill will be introduced in the parliament for the approval.

This bill was mainly drafted keeping in view the problems being faced by the borrowers from micro finance institutions. It is also known that several suicide cases came to light in rural areas of AP reportedly over the pressure of micro finance institutions.

The bill makes it mandatory for all micro finance institutions to be registered with the Reserve Bank of India and should contain a minimum of five lakh rupees. It is supposedly a good step taken by the Centre and likely be welcomed by even the opposition parties.
(Phani)