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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Once the initial recommendations are refined and suitably accepted, I would additionally add that the Malegam committee should recommend the creation of an ongoing working sub-group or expert group that continues to be engaged with the sector for several years to come and that creates an ongoing implementable roadmap for delivery of other critical services that clients need.

Abhay January 25, at 8: Drop everything from the report that could stifle competition, threaten the existence of small MFIs, heighten entry barriers, make it difficult to reach remote and difficult terrains, limit borrower choice, limit lending methodology, discourage innovation and those clauses that are impractical to enforce.

Bhalchander January 24, at Dear Ramesh, This is a wonderful blog. More importantly, the resultant search for greater efficiencies will surely result in more committer cuts being taken with regard to client acquisition, client engagement and the like – we all know what problems that all of this o in AP in the recent past.

That is what Rameshs analysis shows. 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.

Malegam Committee Report – Summary of Key Recommendations

Instead of criticizing further let me offer some suggestions the RBI could consider before releasing the regulatory framework: What do you think, did I misread the recommendations? Oh said, I have pointed out several issues that the committee would need to think about seriously and thanks for your views and let me look at them closely and your mcirofinance are well taken The Malegam committee report must be strongly appreciated because it seeks to legitimize microfinance as an integral part of the Indian financial sector.

Many of malegzm 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…. Given that there is such a hue and cry when the MFIs by and large are dealing with only a single product not sure if the regulator can afford micrpfinance take the risk of opening up the rwport to them, although the suggestion is a good one.


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 A third issue that merits appreciation is the fact that the report has sought to promote greater transparency with regard to interest rates…through various measures.

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

It seems possible within the proposed regulation that a borrower earning Rs. What authority does RBI has in controlling state’s populist actions. Looking from a public policy perspective, Malegam committee’s role may not be viewed just in light of current crisis but in strengthening financial inclusion agenda.

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.

Consider extending banking correspondent model to MFIs – for and commitee.

Sasi Thanks for your mail and the suggestions. I dont want to get into this as it would open up a number of questions micrkfinance the suicides of the customer and the lack of customer protection measures under existing regulation.

Work From Home Hence, the committee may want to go with the existing RBI ceiling of Rs 50, for loan size as well as total loan outstanding and back it up by ensuring that MFIs have good loan origination and appraisal systems especially, for large non-consumption loans to individuals, which must also be permitted and appropriate ceilings for consumption loans as already proposed by microfinancr committee.

I agree that the committee provides much needed legitimacy to the sector by emphasizing the need for enhanced regulation. How to earn Rs in 10 Minutes. To conclude, I feel once a special category NBFC MFIs is created and the black sheep is weeded out nothing stops RBI from going ahead with your suggestions below which are all a definite need for the long term sustainability of the sector.

The Malegam committee report must be strongly appreciated because it seeks to legitimize microfinance as an integral part of the Indian financial sector. As many have argued, the proposed margin caps would force MFIs to make microfijance loans.

Malegam Committee Report – Summary of Key Recommendations

They are expected to offer policy recommendations on need for RBI’s regulation of the industry larger national interest. Work From Home 3 Online Jobs that pay you Rs per hour Since time immemorial people have tried to maximize the returns that they get from This would be a pareto optimal solution indeed….


But my concern is not about that. This has not offered any sort of immunity to MFIs from state control, then what is it that the committee rfport that changes this?

Eighth, it would also be useful if the committee looks at the aspect of equity investment in MFIs and build necessary safeguards to ensure that what happened in AP does not recur again.

While each recommendation by itself is well-intentioned, the net effect may be disastrous.

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

To clarify, the issue is not one of not wanting to take on the regulator – I have been fairly critical of supervision in Indian MF and also talked of regulatory failure here Newer Post Older Post Home. Work from home repotr Investment.

I am sure you would recall my posts on that 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 Dear Ramesh garu, As always I enjoyed reading this thoughtful analysis.

Not sure, how RBI would balance this Work From Home Work from home without Investment Everybody dreams of working from home and being your own boss but very few Dear Sasi Garu Many thanks and I have enjoyed your analysis and responses as welll and I did with the one above Then what use is the statement made by the committee after all? Unfortunately despite this attempt the State Govt still feels that the RBI report is more to protect MFIs interest than the customers interest, so they want more micro management from RBI than what is proposed in the Malegam committee report Fourth, the report has recognized and stressed the importance of off-site and on-site supervision of NBFC MFIs including systemically important ones while also alluding to the need for significantly enhancing the supervisory capacity of RBI with regard to micro-finance.

Bonam Srinivas January 28, at No doubt the report brings out some excellent recommendations that would go a long way in strengthening the sector. I really think there is a fantastic opportunity which is not getting the required attention.

Sasi January 26, at Swarup January 24, at 9: