The Hindu : National : Bill to designate NABARD as micro finance regulator tabled

Online edition of India's National Newspaper
Wednesday, Mar 21, 2007
ePaper


<![if lt IE 4]> <script src="http://servedbyadbutler.com/adserve/;ID=150167;size=468x60;setID=96691;type=js" type="text/javascript"> </script> <noscript> <a href="http://servedbyadbutler.com/go2/;ID=150167;size=468x60;setID=96691"> <img src="http://servedbyadbutler.com/adserve.ibs/;ID=150167;size=468x60;setID=96691;type=img" border="0" height="60" width="468" alt=""></a> </noscript><![endif]>

National

National

Bill to designate NABARD as micro finance regulator tabled

Special Correspondent

In a bid to provide orderly growth of the sector

NEW DELHI: A Bill seeking to designate NABARD (National Bank for Agriculture and Rural Development) as the micro finance regulator was tabled in the Lok Sabha on Tuesday.

The Microfinancial Sector (Development and Regulation) Bill 2007 seeks to provide for the development and orderly growth of the micro finance sector in rural and urban areas to ensure that small borrowers gain access to integrated financial services.

Accordingly, the Bill proposes to empower NABARD to function as the developer and regulator of the micro finance sector and formulate policies for its orderly growth so as to ensure transparency, effective management and good governance. The bank would also specify the form and manner of accounting of business operations of micro finance organisations, other than those accepting thrift services.

For the development of the micro finance sector, the Bill also seeks to set up a corpus called the `Micro Finance Development and Equity Fund'. On legislation of the Bill, it would be mandatory for micro finance institutions to register with NABARD and no organisation would be permitted to carry on the business of offering thrift services to eligible clients without obtaining certificates.

Even the existing institutions would have to obtain the registration certificate. To be eligible for registration, the organisation should have a minimum net owned fund of Rs. 5 lakh. As per the provisions of the Bill, an amount not exceeding Rs 50,000 to an individual or tiny enterprise would qualify as micro-finance service while the limit for housing purposes stands pegged at Rs. 1.5 lakh. For safeguarding the interests of depositors, the Bill proposes the setting up of a reserve fund in which a minimum 15 per cent of the net profit or surplus realised out of thrift services is to be parked.

Printer friendly page
Send this article to Friends by E-Mail

National