India: The Microfinancial Sector (Development and Regulation) Bill, 2007

This ‘Microfinancial Sector (Development and Regulation) Bill aims to “provide for promotion, development and orderly growth of the microfinance sector in rural and urban areas for providing an enabling environment for ensuring universal access to integrated financial services, especially to women and certain disadvantaged sections of the people, and thereby securing prosperity of such areas and regulation of the microfinance organisations not being regulated by any law for the time being”. The Bill comprises nine chapters that deal with the following:

• The short title, the commencement, and the definitions of various terms.
• Outline of the constitution, composition and functions of the “Micro Finance Development Council”.
• The procedure of registration of microfinance organizations.
• The procedures of creating a reserve fund, balancing the accounts, auditing and filing returns.
• The functions and powers of the “National Bank” in relation to thrift and microfinance services.
• The constitution of the “Micro Finance Development and Equity Fund”.
• Redressal mechanisms.
• List of offences and penalties.
• Miscellaneous provisions.

The Bill concludes with a “statement of objects and reasons”.