Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: form 3cd :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: VAT RATES :: cpt :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: VAT Audit :: ACCOUNTING STANDARD
General »
 GST Network signs MoU With DGFT for sharing of foreign exchange realisation data
 Number of companies paying tax over Rs 100 crore declines in 2013-14
 Tax and the dilemma of the self-employed
 Banks warn share tax hike threatens Paris' post-Brexit appeal
 PMC may decide on property tax rebate for IT firms this week
 I-T Dept is giving out certificates of appreciation. Have you received yours?
 Government works on ironing out benefits refund mechanism for exportersa
  Tax officials are using an IDS provision to question transactions beyond six-year-limit
 Tax-free bonds rally like midcap funds
 Senior citizens do not have to pay advance tax on salary and interest income
 GST: Audit commissioners to get adjudication powers

For understanding, Banks join to audit books of microfinance institutions
November, 26th 2010

Banks that lend to microfinance institutions (MFIs) have formed a consortium and are auditing the books of key firms to get a clear understanding of industry practices.

The initiative is being led by the Small Industries Development Bank of India (Sidbi), according to Chandra Shekhar Ghosh, chairman and managing director of Bandhan Financial Services Pvt. Ltd, India's fourth largest MFI by loan portfolio.

Kolkata-based Bandhan's books are currently being audited. "I know of such audits being conducted at three-four other MFIs," Ghosh said. "We welcome the move."

It is not new for banks to examine the books of MFIs to which they lend, but this is the first time they are sharing intelligence among themselves, and trying to understand how the industry works, he added.

Though not triggered by the ongoing crisis, the audit is aimed at understanding if the quality of assets remained sound, and if MFIs had proper systems for loan disbursement and recovery, according to a banker, who is part of the lenders' forum conducting the audit. He did not wish to be identified.

Commercial banks made fresh loans to the tune of at least '7,782.36 to MFIs in fiscal 2010, and their collective outstanding loans to the industry were at '9,940 crore at the end of March, according to a recently released report by Access Development Services, a not-for-profit organization that offers consulting services to MFIs.

That apart, Sidbi alone had a loan exposure of '3,808.2 crore as of 31 March, having made fresh loans of '2,665.75 crore to MFIs in fiscal 2009-10, according to Access.

The figures are based on provisional data provided by the National Bank for Agriculture and Rural Development (Nabard), Access says, and the actual exposure of Indian financial institutions, which includes regional rural banks and some banks that didn't report figures, could approach '15,000 crore.

The audit could be expanded, and the books of 10-12 MFIs be examined, according to the banker cited above. He said audits at two leading firms--SKS Microfinance Ltd and Equitas Microfinance India Pvt. Ltd--had already been concluded. Spokespersons for SKS and Equitas, however, said they were not aware of any such audit.

Officals from twelve private sector and foreign banks that lend to MFIs had met to give feedback on the MFI industry for the Access report. Of them, six had a positive outlook on the sector, while three said they were to "exercise caution" and closely watch "emerging developments", and the rest said their outlook was "not positive".

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions