RBI asks banks to not choke funds to MFIs

The Pak Banker - - Front Page -

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

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