26

Sa-Dhan Patrika

Volume 6

Issue 1

In

her

presentation,

Nomasa

like pensions and insurance, urgently

Motseghare, from MFRC, South Africa

required among the poor in the urban

reiterated the importance of non-

informal sector. The directives and legal

prudential norms in mF regulation and

procedures on the basis of which RBI

the absence of a multiple-regulation

undertakes supervision, cramps the

system in South Africa. The entities

flexibility of a development organisation.

registered with MFRC are exempted from

Ms Vyas successfully made a case for a

the provisions of the Usury Act and all

single body regulator for mF agencies, so

microlending activities are under the

that financial services were made more

supervision of MFRC. The protection of

accessible with lower transaction costs.

the consumer is the primary priority,

observed Motseghare. Specific features

Ricardo P Lirio brought with him the

of the regulatory regime like the National

regulatory experience of the mF sector in

Loans Register and the Consumer Credit

the Philippines. He observed that the

Act 2005, which is in the offing, were

Central Bank had been mandated by

The entities

discussed in detail.

the General Banking Law (2000) to

registered with

recognise the peculiar characteristics of

MFRC are

Sitarama Rao from SKS brought out the

mF. Though mFIs accepting deposits had

exempted from the

Sa-Dhan perspective on governance,

been brought under the regulatory

provisions of the

prudential norms and standards. The

framework, they were excluded from

Usury Act and all

challenge before the mF sector has been

strict prudential regulations. He said that

microlending

to chart out a process by which the

the macro-level data with the Central

activities are

objectives  of  sustainability  and

Bank reveals that there had been a large

under the

expanded outreach could be attained

increase in the credit disbursement from

supervision of

in a regulated manner. In its exercise, Sa-

the mF-oriented banks and as in savings

MFRC

Dhan had taken various standards

mobilisation. Elaborating on the Filipino

suggested by different rating agencies

experience was the presentation by

and taken the best of the criteria, to

Jamie Aristotle Alip, who gave an

generate the performance standards, he

overview of the functioning of CARD, a

remarked.

mutually-reinforcing institution set up for

the upliftment of the poor. The major

Commenting on the community

obstacle to the growth of the sector, he

development movement of the

observed, was the high level of auditing

Seventies in the US, Rebecca Black from

tasks.

USAID observed that the same was

p r e c e d e d by credit unions and

V Raghunathan from GMR Foundation

agricultural cooperatives. The trust

was sceptical about the prospects of

gained by the community development

supervision,  given that the sector,

corporations became self-evident with

particularly in India, was too large to be

m o s t of them handling large loan

dealt with. Moreover, he argued, that a

portfolios, a majority of which was routed

country with such diverse lingual, cultural

through the banks. She observed that in

and economic groupings could hardly

the course of the prosperity of the Nineties,

be brought under one umbrella of

many of them have started dealing with

regulation. Yet another challenge would

billions instead of millions of dollars. The

be to see how the states concerned

challenge ahead for the sector,

could be brought on board, while at the

observed Black, would be to get

same time, retaining the character of a

formalised, without losing its inherent

central legislation, he observed.

innovativeness.

The experience of the Regional Rural Bank

Technical Session I V

(RRB), Vishakha, was shared with the

D e v e l o p m e n t a l Challenge of

audience by Anantha Krishna, who

Supervision

observed that the earlier scepticism that

The fourth Technical Session on

the banking system harboured regarding

`Developmental

Challenge

of

the bank-SHG linkages was no longer

Supervision' was chaired by G C

valid. Group lending to SHGs, he

Chaturvedi, Joint Secretary, Ministry of

remarked, was resulting in structural

Finance (MoF). Apart from explaining the

transformation of rural economies, creating

celebrated success of the SEWA

employment

opportunities

and

experiments in banking with urban

encouraging increased participation of

women working in the informal sector,

women in the economy.  Product

Jayashree Vyas from SEWA Bank drew

diversification and development of skills,

the attention of the house to the various

coupled with the creation of new markets,

legislative restrictions that disabled UCBs

he hoped, would result in further

from providing various financial services

improvements in the livelihoods of the poor.