Financial Daily from THE HINDU group of publications
Wednesday, Oct 26, 2005
Financial Daily from THE HINDU group of publications Wednesday, Oct 26, 2005 |
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Money & Banking
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Credit Policy Micro finance fund corpus raised to Rs 200 crore Our Bureau
Mumbai , Oct. 25 THE Micro Finance Development Fund, set up by the National Bank for Agriculture and Rural Development, has been re-designated as Micro Finance Development and Equity Fund (MFDEF). The Reserve Bank of India , in its mid-term review of monetary policy, has also raised the corpus of the fund from Rs 100 crore to Rs 200 crore. The modalities in regard to the functioning of MFDEF are being worked out, says the review. The linking of self-help groups (SHGs) with the banking system is the major component of the micro-finance programme and by the end of July 2005, as many as 16.53 lakh SHGs were linked to the banks with a credit outflow of Rs 7,063 crore. The RBI is currently examining the recommendations of its internal group, chaired by Mr H.R. Khan. The group was constituted to look into the issues relating to rural credit and micro finance. One of the important recommendations in the group's report, submitted in July this year, is for providing comprehensive financial services in rural areas covering savings, credit, remittance, insurance and pension products. According to the review, the Centre has accepted, in principle, the suggestions of the task force under the chairmanship of Prof. A. Vaidyanathan with regard to drawing up an action plan for reviving the rural co-operative banking institutions and putting in place a regulatory framework for them. The Centre has also held consultative meetings with the State Governments on the recommendations. The RBI will constitute an internal working group to examine the whole gamut of issues pertaining to extending of special relief measures by banks in areas affected by national calamities. The working group will suggest suitable revisions in the existing guidelines with a view to making them comprehensive.
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