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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With the capital requirements proposed in the report it would be more meaningful if MFIs are allowed to offer savings services.

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.

Vijay January 24, at 9: Excellent blog by Ramesh. Read a lot of your work and enjoy it Instead of criticizing further let me offer some suggestions the RBI could consider before releasing the regulatory framework: The much-awaited Malegam committee report is laudable because it is the microfinaance committee report of some significance to attempt the creation on of a national regulatory framework for Microfinance in India. Bring all private microfinance players under one ambit, not just NBFCs.

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

I doubt if this changes just by adding a suffix without suggesting necessary amends in state moneylending laws. Knowing your writing style, I think you have been too kind to the committee, perhaps because it may not sound like a good idea to take on a regulator. Everyone was aware of the problem but seemed helpless, all the attempts by Industry association were invain as none cpmmittee the time or interest to work for a sustainable solution the debate on this continued endlessly till the Govt came down heavily and forced the MFIs to submit the data While we can separately discuss on the pros and cons of some of the suggestions, I really liked one idea of yours which is the public private partnerships.

This ensures that micro-finance will come under the purview of the RBI and no longer can microfinance be treated as a fringe activity or as an orphaned child in the larger Indian maelgam sector. Many of these 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….


Unfortunately both the Banks and MFis have let it down, this si despite repeated warnings by RBI on various occassions, however, the going was so good that the MFIs felt that they have become super powers and none can dictate terms to them. 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 As far as I know – none. 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.

Your views are highly balanced and enlightening. 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.

Not sure, how RBI would balance this If this recognition was to come with tighter regulations – much higher minimum capital requirements, limited choice for borrowers, infringement on the fundamental right of citizens to join any number of groups they wish, price controls and killing competition – I am not sure if there anything to celebrate committtee.

Please refer to www. Hence, the committee may want to go with the existing RBI ceiling of Rs 50, for microffinance 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 the miceofinance.

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

What authority does RBI has in controlling state’s populist actions. It seems possible within the proposed regulation that a borrower earning Rs.

Then what use is the statement made by the committee after all? But I guess it was left with no other option. Consider extending banking correspondent model to MFIs – for and non-profits. At the cost of repeating some of the things I have the following to say – You may be aware that despite several requests from the sector till the recent past RBI was reluctant to regulate the sector as they felt it would stifle the growth.

They are expected to offer policy recommendations on need for RBI’s regulation of the industry larger national interest.


We have reproduced the same malegm the India Microfinance website. Dear Ramesh Thank you for summing up the salient points and your to the point recommendations. This is admittedly a suggestion that perhaps cannot be implemented on the ground.

Malegam Committee Report – Summary of Key Recommendations

Abhay January 25, at 8: 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 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 You may be aware that within 2 weeks all the MFIs have submitted the data perhaps this is the only way things would work as we are used to learn the hard way.

Overall, the Malegam Committee has done a highly commendable job maoegam a very complex problem and that needs to fully recognized and well appreciated. This has not offered any sort of immunity to MFIs from state control, then what is malefam that the committee recommends that changes this? What do you think, did I misread the recommendations? 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 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.

Thanks once again for all your comments Best Regds Bonam Srinivas. Learn To Earn Online 5. 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.

Sixth, there maleagm several other aspects in the report that require commendation: Swarup January 24, at 9: