The Reserve Bank of India on Friday announced the formation of a Sub-Committee to look into the functioning of Micro Finance Institutions which have come under criticism for arming twisting loanees to recover loans.
RBI Governor D Subbarao told media persons that the Sub-Committee will look into the functioning of the MFIs and the possible course of action to be taken by the Bank to check these institutions.
The arm-twisting methods had on Thursday forced the state government to draft an Ordinance, giving itself more powers to check the MFIs. The Ordinance got the state Governor’s nod on Friday.
Dr Subbarao was however reluctant to say that if the RBI will come out with any regulation to check the MFIs.
The RBI governor also revealed that the Bank had discussed the Ordinance promulgated by the state government and discussed its implications on the MFIs.