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Report Summary. Malegam Committee on Microfinance. (January ). Background. The Board of Directors of the Reserve Bank of India. (RBI) constituted a. PDF | On Nov 7, , Saswat Barpanda and others published The Malegam Committee Microfinance Report: Will the MFIs Accept It?. Malegam Committee Report on MFI – Download as PDF File .pdf), Text File .txt) or read online.

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Ofcourse, the good thing is Malegam Committee has specifically suggested that RBI should come out with a detailed customer protection guidelines, which perhaps would give the state Govt some comfort to withdraw the monsterous act That said, I am therefore a bit perplexed by the strong initial criticisms of the Malegam report…While stakeholders appear to have perceived several weaknesses in the report, I try to list some of these below and provide some explanations with regard malegwm these issues, apart from suggesting ways forward.

Bring all private microfinance players under one ambit, not just NBFCs.

Malegam Committee Report on Microfinance: What’s On The Platter?

But I guess it was left with no other option. A second aspect is the use of caps for annual family incomerestricting it to Rs.

Also the regulators focus when introducing guidelines would be more to see on handling exceptions, so how do you ensure that the borrower is not becoming a member in multiple groups and threatening the very basic principle of peer pressure on which the model works This seems fair from an equity pun intended perspective….

Have a great day and wonderful start into the week! It seems possible within the proposed regulation that a borrower earning Rs. Commitfee January 24, at 9: Your views are highly balanced and enlightening.

The much-awaited Malegam committee report is laudable because reoort is the 1st committee report of some significance to attempt the creation on of a national regulatory framework for Microfinance in India. Read a lot of your work and enjoy it I agree that the committee provides much needed legitimacy to the sector by emphasizing the need for enhanced regulation. A third issue that microfiinance appreciation is the fact that the report has sought to promote greater transparency with regard to interest rates…through various measures.


You may be rwport that within 2 weeks all the MFIs have submitted the data perhaps this is the only way things would work as we are used to learn the hard way.

Fifth, the strong emphasis on corporate governance is note worthy and specifically, the committee has suggested that corporate governance rules will have to be specified encompassing several issues for NBFC MFIs by the regulator. While each recommendation by itself is well-intentioned, the net effect may be disastrous. Eighth, it would also be useful if the committee looks at the aspect of microfinanve investment in MFIs and build necessary safeguards to ensure that what happened in AP does not recur again.

That is what Rameshs analysis shows. Many of these issues can easily be addressed by dialogue and discussion and do not take away the excellent work done by Malegam committee — that is a point that I would like to make clear upfront…Read on….

I am sure you would recall my posts on that Sasi January 26, at At the cost of repeating some of the things I have the following to say – You may be aware that despite several requests from the sector till the recent past RBI was reluctant to regulate the sector as they felt it would stifle the growth. Bonam Srinivas January 28, at But I doubt if it has done justice to the industry as a whole.

Read on at Microfinance in India Blog. As it is proven that MFIs, are efficient and effective in reaching out the last mile, it would be interesting if the Govt and the MFis can explore and looking at ways of channelising the benefits available from the Govt.

Honestly, I am evolving as a writer and I appreciate your feedback – both postive and negative Thanks once again Look forward to meeting you some day Thanks once again for all your comments Best Regds Bonam Srinivas. This ensures that micro-finance will come under the purview of the RBI and no longer can microfinance be treated as a fringe activity or as an orphaned commjttee in the larger Indian financial sector.


Ramesh S Arunachalam January 26, at Learn To Earn Online 5. Should RBI be looking at a special category of Banks for such limited players that too micofinance the current circumstances.

Pragmatism is necessary coupled with better regulation to ensure to craete a win win situation. What authority does RBI has in controlling state’s populist actions. Knowing your writing style, I think you have been too kind to the committee, perhaps because it may not sound like a good idea to take on a regulator.

Malegam Committee Report – Summary of Key Recommendations

The committee must also recognize that caps on loan sizes and total loan outstanding may be some what restrictive for the clients ckmmittee perhaps even at variation with current RBI policy. Fourth, the report has recognized and stressed the importance of off-site and microfijance supervision of NBFC MFIs including systemically important ones while micfofinance alluding to the need for significantly enhancing the supervisory capacity of RBI with regard to micro-finance.

This ensures that micro-finance will come under the purview of the RBI and no longer can microfinance be treated as a fringe activity or as an orphaned child in the larger Indian financial sector.

That said, I have pointed out several issues that the committee would need to think about seriously and thanks microfinamce your views and let me look at them closely and your points are well taken Dear Ramesh garu, As always I enjoyed reading this thoughtful analysis. As many have argued, the proposed margin caps would force MFIs to make larger loans. Then what use is the statement made by the committee after all? A very critical aspect indeed….

At any rate, not treating Sa-dhan as an MFI association will again be perceived as patently unfair and hence, this aspect also needs to be reconsidered…and perhaps changed accordingly