Andhra Pradesh to introduce MFI Bill on December 10

The Andhra Pradesh government will introduce the microfinance Bill on December 10, a senior bureaucrat said. The bill seeks to curb the coercive methods adopted by lending companies for recoveries from rural borrowers.

However, the official said there would not be any cap on the interest rates being charged by microfinance institutions (MFIs).

“The ordinance which was promulgated in October will be introduced as it is,” Principal secretary, Panchayat Raj and Rural Development, R Subrahmanyam said.

“There will not be any modification in the bill. We are very firm on curbing the coercive methods of recoveries. We have prepared our report and will submit it to a Reserve Bank of India (RBI) team scheduled to visit the state on December 15. We are making an elaborated submission,” he said.

The bill makes registration for MFIs mandatory, with non-registration resulting in a three-year jail term or a fine of Rs 1 lakh.