Centre to bring in Bill to regulate Microfinance firms:FM

Hyderabad, Nov 3 (UNI) Union Finance Minister P Chidambaram today said a Bill would be introduced in Parliament soon to regulate the functioning of microfinance companies in the country.

''We are in final stages of formulating a Bill to introduce minimal regulation of microfinance firms'', he said, inaugrating the ''Banacon-06'', Indian Banking conclave here.

Describing NGOs and Microfinancing companies as an ''important armoury to reach out credit to the needy'', he justified collection of 25 per cent interest by such firms, saying that it was not not at all an exploitative rate of interest.

Calling for change in the mindset of the people, he said ''One has to recognise that there is a cost for delivering microfinance''.

Cautioning bankers against higher exposure to certain sectors like credit cards, real estate and housing loans, he wanted them to focus on stepping up lending to the poorer sections of people who were ''good savers and good borrowers too''.

Though the number of bank branches had expanded in an explosive manner, the level of accessibility of banking services remained almost the same in the last 37 years, he lamented, adding ''the poor in India deserved equal treatment with others''.

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