Reserve Bank of India May Allow MFIs to Function as Business Correspondents of Banks
Friday, May 2, 2014
“With financial inclusion, especially technology-based inclusion, high on the RBI radar, it is imperative that MFIs that have a strong reach in unbanked areas to provide the last mile connectivity, be allowed to function as a business correspondent for banks.
Only operational issues need to be ironed out,” a senior banking industry official said. Micro finance entities that had been in the doldrums following the crisis due to the promulgation of a restrictive Andhra Pradesh law on functioning of micro finance entities in 2010, have been gradually moving to better processes, improved data sharing and recovery practices.