The Reserve Bank is contemplating a revision of the maximum interest rates chargeable by microfinance institutions.
The revision of the rules, Acts or the interest rate under reference comes close on the heels of the State government's promulgation of an Ordinance to check the spread of MFIs.
Minister for Rural Development Vatti Vasantha Kumar, on Saturday, told media persons that RBI Governor D Subbarao had talked to Chief Minister K Rosaiah over the issue on phone.
Vasantha Kumar revealed that Rosaiah had written letters to the Union Finance Minister Pranab Mukherjee and RBI Governor D Subbarao on the heavy rate of interest being charged and the forcible loan collection including the unethical practices adopted by the MFIs.
Mukherjee is understood to have told Rosaiah that the Centre was well aware of the issue and is contemplating measures to check the issue.
Subba Rao informed the CM that the RBI officials had discussed the issue in a board Meeting. He also revealed that the Bank had appointed a Subcommittee to evolve modalities to arrive at a decision in favour of lowering the interest rate.
The RBI governor is understood to have informed the Chief Minister that the Apex Bank would also take the suggestions of the State into account while revising the rule or act or the interest rate under reference.
It may be recalled here that the State government had already passed a draft resolution for the Money Lender's Act, and that it was forwarded to the Centre for Parliamentary approval and then for the assent of the President of India.
Vasantha Kumar said that because the State government had no say on regulating the interest charged by the MFIs, the Chief Minister had requested for this in his letter to the Union Finance Minister.
The minister also stated that the union finance secretary C Gopalan had bluntly said that the State had no say on this issue.
Courtesy: INN
filed in:Microfinance, Microfinance Institutions, RBI, D Subba Rao, Loans