The Reserve Bank of India (RBI) may soon allow microfinance institutions (MFIs) to acquire banking licenses and accept deposits.
India’s Finance Minister, Mr Pranab Mukherjee, stated that the “RBI has framed a set of guidelines for setting up new banks… and has recently floated a discussion paper. Interested parties and stakeholders have submitted their suggestions to RBI. The central bank will now finalize its view on the issue and soon allow new entities to take up banking activities.”
The comments were made during the launch of a broader plan for financial inclusion in the country. If large numbers of MFIs acquire banking licenses, it would open the possibility of 25 million microborrowers becoming depositors.
By Witt Gatchell, Research Associate
About Reserve Bank of India (RBI):
The Reserve Bank of India (RBI) is India’s central banking authority. Established in 1935, the RBI undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies. The current focus of RBI is to supervise financial institutions, consolidate accounting standards, resolve legal issues in banking fraud, monitor non-performing assets and supervise the rating model for the banking sector. RBI consists of twenty-two regional offices.
Sources and Additional Resources:
Source Article: The Economic Times: “MFIs may get to set up banks,” http://economictimes.indiatimes.com/news/economy/finance/MFIs-may-get-to…
MICROCAPITAL BRIEF: More Bankers Joining Indian Microfinance Industry: https://www.microcapital.org/microcapital-brief-more-bankers-joining-indi…
MicroCapital Universe: Reserve Bank of India (RBI): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Res…
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/tiki-index.php
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