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: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: form 3cd :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: cpt :: TDS :: empanelment :: articles on VAT and GST in India :: list of goods taxed at 4%
 
 
« General »
 Filing ITR just got easier for salaried class with CBDT's one-page form
 Why consumers should welcome GST
 Retailers need to file single GST return every month
 Aadhaar is must for income tax returns if you have one; Here's how you can file it online
 Will it be a tax haven above the law?
 Your mutual fund investment tax efficient? Here are 3 steps to ensure utmost efficiency for your portfolio
 Finally a goods and services tax. But what lies ahead?
 Tax May Rise On Outbound M&As, Indian Mncs’ Investments
 Filing income tax return? Do remember to claim benefits on your reimbursements
 Banks will have a hard slog ahead to get GST-ready
 Clarification regarding applicability of Section 16 (1)(a) of the Companies Act. 2013 with reference to cases under corresponding provisions of Companies Act. 1956

RBI look for details of bank exposure to MFIs
November, 24th 2010

As the functioning of non-banking finance company-microfinance institutions are causing concern, the Reserve Bank of India has called for data from all banks on their exposure to these institutions.

Given that MFIs' operations have been impacted due to the Ordinance passed by the Andhra Pradesh Government last month, bankers fear that their loans to these institutions could turn bad.

Almost a third of MFIs' outstanding loans are in Andhra Pradesh. Banks have a collective exposure of about Rs 11,000 crore to MFIs.

The RBI, say bankers, may be trying to assess the quantum of loans that could turn bad and whether banks could go in for debt restructuring.

A series of reports about borrowers in rural Andhra Pradesh ending their lives due to strong arm recovery practices adopted by recovery agents led the AP Government to pass the Andhra Pradesh Microfinance Institutions (regulation of money lending) Ordinance, 2010, in October.

MFIs in the State are finding the going tough after the Ordinance was passed. Recoveries have come to a standstill as MFIs cannot deploy agents for recovery. On the interest rate front, the Ordinance has prescribed that no MFI can recover from the borrower an amount in excess of the principal amount.

Fearing bad loans, banks have become wary of taking further exposure to the MFI sector.

Industry-watchers say dual regulation by the RBI and the Andhra Pradesh Government of MFIs is bad for the sector. They pointed out that dual regulation has proved to be the bane of co-operative banks.

Mr Alok Prasad, CEO, Microfinance Institutions Network (MFIN), the umbrella body of all MFIs registered as NBFCs, said the MFI sector would be better off if it was regulated by the RBI and a Central Legislation.

With the MFIs' lending and recovery practices not going down well with the stakeholders rural borrowers, banks, RBI and the Government the RBI has set up a sub-committee to study issues and concerns in the microfinance sector.

The sub-committee, headed by Mr Y.H. Malegam, a senior member of the Reserve Bank's Central Board of Directors, will review the definition of microfinance' and microfinance institutions' for the purpose of regulation of NBFCs undertaking microfinance and examine the prevalent practices of MFIs in regard to interest rates, lending, and recovery practices.

It will also examine and make appropriate recommendations in regard to applicability of money lending legislation of the States and other relevant laws to NBFCs/MFIs.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

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