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.

Source: The Free Press Journal (link opens in a new window)

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banking, financial inclusion, governance, microfinance