RBI asks banks to not choke funds to MFIs
NEW DELHI: Bankers met with senior officials at the Reserve Bank of India (RBI) to discuss lending to microfinance institutions (MFIs) today. Throwing light on the meet, senior banking officials told CNBC-TV18 that the RBI has asked banks not to choke funds to MFIs. Consortium lending has been proposed by the central bank to banks offering loans to microfinance institutions.
The RBI-bankers meet also discussed restructuring of loans to MFIs. Bankers including officials from Central Bank, Standard Chartered, BNP Paribas, and Indian Banking Association however feel that the RBI should take a call on the restructuring package. Though there have been no cases reported of MFIs defaulting on loans as of now, bankers feel that regulation of MFIs is necessary.
Bankers expect operations in other states to get affected going forward. They however feel that collections from selfhelp groups will not be impacted. Bankers also see a slight fall in collections other than from Andhra Pradesh. - PB News