Mumbai: Amid growing criticism over the use of coercive methods of microfinance institutions (MFIs) to recover loans, the Reserve Bank of India (RBI) on Tuesday said its sub-panel will look into the functioning of such lenders and submit its report in three months, reports PTI.
"The sub-committee will submit its report in three months," the Reserve Bank said in a statement.
"Y H Malegam, a senior member on the Central Board of Directors of the Reserve Bank of India will chair the sub-committee," it added. Other members of the panel include Kumar Mangalam Birla, Shashi Rajgopalan and RBI deputy governor K C Chakrabarty.
The sub-committee of the central board of directors of the central bank will study the issues and concerns of the microfinance sector, including interest rates charged by the lenders in this area.
The RBI further said that there have been some concerns expressed in the media about high interest rates, coercive recovery processes and multiple lending practised by some microfinance institutions.
The Reserve Bank regulates only those MFIs which are registered with it as non-banking finance companies (NBFCs).
However, it does not prescribe lending rates for these institutions, it added.
Although the registered companies cover over 80% of the microfinance business, in terms of number of companies they constitute a small percentage of the total number of MFIs in the country.
Last week, the Andhra Pradesh government issued an ordinance making registration of microfinance institutions (MFIs) with the state government compulsory.
It aims to rein in microfinance institutions (MFIs), whose coercive tactics led to the death of a number of people in the state recently.
Christened 'Andhra Pradesh MicroFinance Institutions (regulation of money lending) Ordinance, 2010,' the ordinance came into force on 15th October with the governor E S L Narasimhan giving assent to it.
Meanwhile, Microfinance Institutions Network (MFin), an association of 44 MFIs has filed a petition in the Andhra Pradesh High Court challenging the ordinance. The hearing on the petition is expected to come up for hearing today.
L&T execution picks up; HDFC disbursements healthy
LARSEN & TOUBRO Q2
Net sales: Rs93.4 billion (expected range Rs84.9 billion-Rs95.6 billion)
Net profit: Rs6.94 billion (expected range Rs6.2 billion-Rs8.1 billion)
NII: Rs10.85 billion (expected range Rs9.7 billion-Rs13.2 billion)
Net profit: Rs8.07 billion (expected range Rs7.6 billion-Rs8.1 billion)
(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife).
The advertising for this car has annoyed us through the print media. And now the TV commercial is trying to make you laugh. What will they unleash on us next?
As if tormenting us with that irritating ‘speaking gizmo’ placed inside the newspaper pages wasn’t bad enough, the Volkswagen suits have unleashed a TV campaign for their new sedan Vento, that makes you want to laugh out loud. For all the wrong reasons. It’s so silly, kids in junior class would come out with better stuff if assigned the creative duties for the brand.
To bring out the passion the Volkswagen engineers feel when putting together this gaadi, the creative route taken is employees sobbing hysterically when the car makes it way out of the factory/showroom!
Just as desi moms weep when the daughter’s doli is being carted away by the baraatis. 'Tears of Perfection' is what they call it.
So the TVC features a plant, where engineers, staffers and other admin chaps weep when it’s time to see-off their beloved Vento. One particularly emotional dude even chases the car on its way out (not kidding). By the way, this would worry me a lot as a customer. I would think there’s fire emanating from the car, and would probably get a stroke, but I digress.
Now, I quite understand why the Volkswagen brand manager chose not to take the rational route. That approach for cars has been done to death. There’s also the possibility that for an entry-level sedan like Vento, there aren’t too many stunning features to harp on. In that context, the emotional route does make sense. So no issues on that score. The problem lies with the extremely stupid rendition of the strategy. Engineers weeping like babies to see the car go is hilarious but for the wrong reasons. It’s like a bad slapstick comedy scene from the sixties cinema. Reminds you of the antics of yesteryear comedians like Rajendranath. The only thing missing is one of the sobbing engineers slipping over a banana peel.
The Vento is an expensive car. It probably costs upward of Rs7 lakh. It’s crazy to dish out such puerile stuff for a product that customers would evaluate a hundred times before closing a deal. This brand needed a deep, powerful emotional idea if the route had to work.
Well, only time will tell how Volkswagen Vento fares in the Indian market place. Right now we know just one thing about the car’s advertising: It first annoys you through the print. And then makes you laugh through the TV. I shudder to imagine what next.