{"id":624061,"date":"2013-03-13T12:42:24","date_gmt":"2013-03-13T07:12:24","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=624061"},"modified":"2013-03-13T12:42:24","modified_gmt":"2013-03-13T07:12:24","slug":"new-rbi-regulations-for-nbfcs-and-mfis-whats-in-store","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2013\/03\/13\/new-rbi-regulations-for-nbfcs-and-mfis-whats-in-store\/","title":{"rendered":"New RBI Regulations for NBFCs and MFIs – Whats in store?"},"content":{"rendered":"

Non-banking Financial Companies<\/a> (NBFC) and Microfinance Institutions<\/a> (MFI) are often the only source of banking services in rural India. In October 2010, the sector took a hard hit after the Andhra Pradesh (AP) government passed an ordinance to check MFIs owing to multiple farmer suicides over coercive collection tactics. As AP was, and still remains, a big market for MFIs, those with high exposure in the state suffered losses amounting to \u20b97,800 crore.<\/p>\n

\"Microfinance<\/a><\/p>\n

Since then, MFIs like SKS Microfinance<\/i> have rebuilt their net worth and resumed operations in AP with the court’s consent; on the condition that they adhere to rules pertaining to loan interest rates and collection practices.<\/p>\n

Post the AP incident, the RBI became the sole regulator of the microfinance function in India. A central bill was also tabled for Parliament approval to override state Acts on MFI regulation. The goal is to protect borrowers’ interests and clarify rules mandating the operations of MFIs and NBFCs across the country. According to RBI norms, all NBFC-MFIs must:<\/p>\n