In India, 50% of microfinance institutions could convert to banks, says regulatory body CEO
Monday, August 25, 2014
About half of Microfinance Institutions Network’s 49 members could follow in the footsteps of Kolkata-based Bandhan and convert themselves into banks in the next couple of years, according to a top official.
While Bandhan was granted “in-principle” approval by the central bank in April 2014 to set up a bank in the private sector, members of Microfinance Institutions Network (MFIN) could metamorphose into “small banks” once the central bank finalises guidelines in this regard.
MFIN is the self-regulatory organisation of MFIs, which are registered with the Reserve Bank of India as non-deposit taking non-banking finance companies (NBFCs), to ensure responsible lending and client protection.