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Home » News » Two Indian States Seek to Regulate NBFCs, MFIs

Two Indian States Seek to Regulate NBFCs, MFIs
Iyer, A.

Two key Indian southern states, Andhra Pradesh and Kerala, are demanding that non-banking financial companies (NBFCs) and microfinance firms register under the local money lending laws, seeking to muscle into the territory of Reserve Bank of India (RBI) which has the authority to regulate these institutions.

Andhra Pradesh and Kerala have told some finance firms operating in their respective states that registration under local laws is a must. “Our aim is to prevent the tribals from being exploited. These illiterate people are often forced to pay very high rate of interests. We cannot be blind to the fact that many of the MFIs also lend at usurious rates, and hence, there is a need to regulate them,” says R Subramanyam, principal secretary of AP’s Panchayati Raj and rural development ministry.

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Posted: 01 Jun 2010
Source: The Economic Times
Originally Published: 01 Jun 2010