MFIs may get activity-based norms soon, making them institution-agnostic

Meanwhile, banks are in the process of seeking clarity from the RBI whether Assam's MFI Bill will be applicable to them

The piece of legislation in Assam — the Assam Micro-Finance Institutions (Regulation of Money Lending) Bill, 2020 —may fast-track making the lending process in the sector institution-agnostic by creating a common code of conduct. The Bill, passed last Wednesday, regulates the amount of lending on the basis of the borrower’s profile and makes registration mandatory for operations in Assam.

Lenders fear overlap in regulation and supervision between the state government and the central bank. They are in the process of seeking clarity from the Reserve Bank of India (RBI) whether the provisions of the Bill will hold good for them.