MONEY & BANKING


Vinod Kothari Vinod Kothari 17 April 2012
On most of the significant policy issues—implementation of Basle III, NBFC regulation, gold loan companies, securitisation guidelines, etc, all that we have in the policy are datelines for policies to be announced by the RBI. There is more in the offing than we have in the policy, reducing...

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Ramesh S Arunachalam Ramesh S Arunachalam 07 January 2012
If SHG version 2 is pushed through without a proper and objective understanding of how the SHG Bank linkage program currently functions at the grass-roots (and the path that it has traversed in the past), it could become a recipe for disaster as has happened with much of Indian microfinance...

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Ramesh S Arunachalam Ramesh S Arunachalam 16 December 2011
Two crucial aspects in microfinance—client origination/targeting and loan appraisal—have been neglected in favour of unprecedented growth (caused by a desire to fully commercialise microfinance and rapidly enhance access/outreach of such services) and this has resulted in the present crisis

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Ramesh S Arunachalam Ramesh S Arunachalam 15 December 2011
While there are many contradictions, inconsistencies and subjective interpretations in the CoC assessments which seem to draw the attention away from the real issues, we hope the sponsors and developers of the SIDBI-World Bank COCA tool recognize the fact that it far from being a reliable and...

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Ramesh S Arunachalam Ramesh S Arunachalam 15 December 2011
It is meaningless that the COCA tool rewards mere existence of policy and/or management statements of policy implementation when it should be really looking at solid evidence in support of implementation of the voluntary codes of conduct on the ground An earlier Moneylife article (Have...

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Ramesh S Arunachalam Ramesh S Arunachalam 14 December 2011
For better credit reporting and the credit bureau to work, ‘the boards of MFIs’ must be able to re-orient their organizational vision to one of responsible finance—this means they will have to move away from their desire for ‘super fast’ unnatural growth to balanced natural growth and normal...

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Ramesh S Arunachalam Ramesh S Arunachalam 14 December 2011
The establishment and use of a credit bureau in an emerging market like India a very challenging task. If serious efforts are made, it could take several years from initial discussions to regular use of the credit bureau—one that produces reliable and valid credit information reports in a...

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Ramesh S Arunachalam Ramesh S Arunachalam 12 December 2011
The hype of the moment in microfinance is undoubtedly to subscribe to all kinds of code of conducts, client protection principles, social performance and other self-regulating initiatives. To set the record straight, had all the stakeholders really subscribed to these in the first place,...

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Ramesh S Arunachalam Ramesh S Arunachalam 12 December 2011
 It is very easy to talk high flying concepts at conferences and also publicly claim that the same is being applied in practice. In reality, however, much of the intended strategies do not get implemented in microfinance and that is something that conference organizers, industry associations,...

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Ramesh S Arunachalam Ramesh S Arunachalam 11 December 2011
Beyond all the buzz, when can we embed social performance within practice? Social performance is the ‘in’ thing in micro-finance and an entire session is devoted at the Micro-Finance India summit towards the same and a special social performance report is also to be released at the...

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Ramesh S Arunachalam Ramesh S Arunachalam 10 December 2011
The two-day summit is expected to analyze and introspect on the issues that have led to the erosion of trust with/in the sector. Additionally, the summit is to attempt and build consensus on how the sector can move forward Come November-December and it is microfinance tourism time across...

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Ramesh S Arunachalam Ramesh S Arunachalam 09 December 2011
The RBI must ensure that informal collateral and/or abusive collateral substitutes do not contaminate microfinance in the future. It should also seriously think on incentives/disincentives that can be set up to eliminate use of informal collateral and/or abusive collateral substitutes, where...

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Ramesh S Arunachalam Ramesh S Arunachalam 08 December 2011
If the concerned RBI departments could not monitor five of the top 13 NBFC-MFIs that were supposed systemically (very) important, then, how can they be expected to set up supervisory mechanisms for several hundred MFIs as per the proposed Microfinance bill? If equity was in some ways...

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Ramesh S Arunachalam Ramesh S Arunachalam 03 December 2011
Without question, the present scenario, in the wake of Friday’s circular, places a huge burden of responsibility on the Department of Non-Bank Supervision and the RBI and for the sake of real financial inclusion, we sincerely hope that the department lives up to its roles and responsibilities...

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Ramesh S Arunachalam Ramesh S Arunachalam 29 November 2011
Let us stop crying over spilt milk but let us not forget what has happened in the past in the desire to achieve scale speedily. Going forward, it would be prudent for the Department of Non-Banking Supervision, RBI as well as proactive MFI boards (like Sahayata and SKS) and other stakeholders...

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Ramesh S Arunachalam Ramesh S Arunachalam 21 November 2011
Fresh perspectives and radical (systemic) changes are required for developing an enabling micro-finance regulatory and supervisory mechanism that can really work on the ground for the benefit of large numbers of low income people Moneylife reported last week that charges of serious...

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Ramesh S Arunachalam Ramesh S Arunachalam 18 November 2011
Charges of serious misreporting and mismanagement again surfaced in the Indian micro-finance. The question is how could a company like Sahayata Microfinance, which was darling of so many investors, lenders and stakeholders go astray I came across a very interesting news item in a...

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Ramesh S Arunachalam Ramesh S Arunachalam 16 November 2011
Lack of a proper regulatory framework, including lack of proper supervision had played an important role in the disorderly growth of the NBFC MFIs A recent news item stated that, “In its report ‘Trend and Progress of Banking in India 2010-2011’, The Reserve Bank of India (RBI) states...

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Ramesh S Arunachalam Ramesh S Arunachalam 11 November 2011
If complaints of low-income MFI clients are resolved at the earliest, it would help avoid another crisis, as was seen in 2010 During the peak of the crisis, I remember Suresh Gurumani, the then CEO of SKS Micro-Finance, responded to my post in the micro-finance practice a Yahoo...

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