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Reserve Bank of India (RBI) Deputy Governor Mr K C Chakrabarty on Friday said the Central bank has started discussion with all the stakeholders regarding implementation of the Malegam committee recommendations on microfinance.
“This (the Malegam report) is at the discussion stage... We have not decided anything yet,” Mr Chakrabarty told reporters on the sidelines of an event here. “Some part of the report like interest rate will be applicable from April 1,” he said.
RBI has already invited public comments on Malegam panel report which suggested among other things capping interest rate at 24 per cent for loans extended by microfinance institutions.
The committee, headed by Reserve Bank’s Central Board Director Mr Y H Malegam, suggested that small loans cannot exceed Rs 25,000 and creating of a separate category of non-banking financial companies (NBFC-MFI) for the MFI sector.
RBI constituted the committee in October last year in the wake of allegations of overcharging and use coercive recovery practices by MFIs that led to a spate of suicides in Andhra Pradesh.
The committee submitted its report on January 19. These recommendations, the committee said, should be implemented from April 1, 2011.
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