Concerned
over unethical measures adopted by some micro-finance
institutions (MFIs) to recover loans, Montek Singh Ahluwalia,
deputy chairman, Planning Commission, today said regulatory
guidelines with a code of conduct would soon be introduced.
Ahluwalia
was addressing a micro-finance seminar in New Delhi.
He
said the proposed bill should aim at greater "transparency
and promoting codes of conduct" enabling the regulator
to intervene, where a micro-finance organisation is visibly
doing something which is improper.
The
government will table a bill in Parliament in the coming
Budget session on micro finance, appointing NABARD as
a regulatory authority.
Ahluwalia
said the proposed regulator could lay down a code of conduct
so that "a micro-finance organisation should not
be use unethical loan recovery measures.
He supported the finance ministry's view that there should
not be any
cap on interest rate for micro financing and favoured
a competitive environment to bring the interest rates
to reasonable levels.
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