The government will soon introduce a bill in parliament aimed at regulating micro finance institutions, Minister of State for Finance Namo Narain Meena said Tuesday.
“The Department of Financial Services proposes to introduce the Micro Finance (Development and Regulation) Bill, 2010 after taking into account the views of the Reserve Bank of India (RBI) and the Malegam Committee recommendations,” Meena said in a written reply to a question in the Rajya Sabha.
The move follows the recent introduction of a new legislation by the Andhra Pradesh government to regulate the micro finance industry. Andhra Pradesh accounts for a third of micro finance institutions’ lending.
The RBI last month constituted a committee under the chairmanship of Y.H. Malegam, a senior member of the central board of directors of the RBI, to look into various issues including ways and means of making interest rates charged by micro finance institutions reasonable.
“The committee will submit its report in three months,” said Meena.
However, the minister did not say by when the government plans to introduce the proposed bill in parliament to regulate the Rs.25,000-crore micro finance industry.