Microfinance Institutions Network welcomes RBI's guidelines for micro-finance industry

HYDERABAD: RBI norms for self-regulatory organisations of NBFCs engaged in micro-finance would aid the process of improved governance and grievance redressal within a well defined framework, microfinance industry body MFIN said.

The guidelines would lead to creation of a layered regulatory framework which would make for a good balance between core regulatory drivers and developmental needs of the industry, Microfinance Institutions Network (MFIN) said in a statement.

MFIN is an industry association of India's microfinance industry.

The guidelines would substantially aid the process of improved governance and grievance redressal, within a well defined framework, it said.

According to RBI norms released on last Tuesday, an SRO must have at least one-third of NBFC-MFIs as its members and adequate capital to be able to discharge its functions without being dependent on its members.

"Over the past three years or so, MFIN has been acting as the de facto SRO and we now look forward to getting formal RBI recognition, under the guidelines issued today," MFIN said.

While membership of an SRO has not been made mandatory, the RBI has advised all NBFC-MFIs to voluntarily become members of at least one SRO.