RBI starts discussion with stakeholders on Malegam report

Mumbai, Feb 18 (PTI) Reserve Bank of India (RBI) DeputyGovernor K C Chakrabarty today said the Central bank hasstarted discussion with all the stakeholders regardingimplementation of the Malegam committee recommendations onmicrofinance.

"This (the Malegam report) is at the discussion stage...

We have not decided anything yet," Chakrabarty told reporterson the sidelines of an event here.

"Some part of the report like interest rate will beapplicable from April 1," he said.

RBI has already invited public comments on Malegam panelreport which suggested among other things capping interestrate at 24 per cent for loans extended by microfinanceinstitutions.

The committee, headed by Reserve Bank''s Central BoardDirector Y H Malegam, suggested that small loans cannot exceedRs 25,000 and creating of a separate category of non-bankingfinancial companies (NBFC-MFI) for the MFI sector.

RBI constituted the committee in October last year in thewake of allegations of overcharging and use coercive recoverypractices by MFIs that led to a spate of suicides in AndhraPradesh.

The committee submitted its report on January 19. Theserecommendations, the committee said, should be implementedfrom April 1, 2011.