1. Presentation on Micro Finance Institutions (Development & Regulation) Bill, 2012 by M R Umarji

2. Basic Issue involved If MFIs are money-lenders how can Parliament make the proposed law?

3. Answers PRE-AMBLE of the Bill refers to MFIs as entities providing credit, thrift and other micro finance services Definition of Micro Finance Services also includes above services in addition to remittance of funds and pension and insurance services. Money lenders do not provide above services and hence MFIs are different and not money lenders.

4. Scheme of RBI for lending to MFIs RBI has formulated a scheme for lending by banks to MFIs for on- lending to SHGs Total amount disbursed by Banks to MFIs 7605 crores during 2010-11 There are no such schemes for money- lenders

5. Regulation of NBFCs engaged in Micro Finance Business If a Company is engaged in Micro Finance Business it has to obtain registration from RBI under the RBI Act, 1934. Such Micro Finance Companies are regulated by RBI under a Central Law on the basis that activity of lending and providing other financial services is similar to ‘Banking’. On the same basis non-corporate entities providing financial services are treated as NON-BANKS and are to be regulated by RBI under the new law.

6. Other Concerns.Unfair debt recovery practices Overindebtedness Provision made in the Bill. RBI to have wide powers including specifying lending rates, margins, amount of loan, place of disbursement, recovery practices, etc. State Level Advisory Councils. District Advisories committee

7. THANK YOU