The Reserve Bank of India, on Friday, announced the formation of a Sub-Committee to look into the functioning of micro-finance institutions, which have recently come under criticism for arm-twisting loanees to recover loans.
RBI Governor D Subba Rao told media persons that the Sub-Committee will look into the functioning of the MFIs.
The arm-twisting methods had, on Thursday, forced the State government to draft an Ordinance, giving itself more powers to check the MFIs. The Ordinance got the State Governor's
nod on Friday.
Dr, Subbarao was, however, reluctant to say if the RBI will indeed come out with any regulation to check the MFIs.
The RBI governor revealed that the Bank had discussed the Ordinance promulgated by the State government and had discussed its implications on MFIs.
Courtesy: INN