Thaindian News

Kolkata, Dec 9 (IANS) The Reserve Bank of India (RBI) will convene a meeting of banks to gauge their stand in relation to microfinance institutions (MFIs) in the interim period between the submission of the Malegam committee report and its study by the bank.

RBI Governor Duvvuri Subbarao told mediapersons here Thursday that the meeting might be held in the next two weeks though the final decision is yet to be taken.

The RBI set up the Malegam Committee last month to study the regulation of MFIs. The issues to be examined by the committee include reported suicides by borrowers in Andhra Pradesh, crass overlending, high interest rates and coercive recovery methods.

“In the interim period in which the Malegam Committee report comes and we study the recommendations, we will convene the meeting of the banks to understand where they stand vis-a-vis the MFI issue,” Subbarao said after an RBI Board meeting.

“Our perception of MFIs is shaped by whatever is happening in Andhra Pradesh but the situation in other states is quite dissimilar. MFI activity is very much going on normally, perhaps there is a small decline,” he said.

“We will discuss with the banks what if anything needs to be done to see that MFI activity continues,” he added.

Subbarao said the Malegam Committee will meet Andhra Pradesh Chief Minister Nallari Kiran Kumar Reddy and other ministers next week.

In course of its deliberations, the committee will meet all stakeholders in other parts of the country as well. The RBI chief said though the committee has been given time till January end, “they will try to give the report sooner”.