NEW DELHI The cabinet has approved a bill aimed to bring microlenders under the Reserve Bank of India's oversight, a minister, who declined to be named as the parliament is in session, said on Thursday.
The Microfinance Institutions (Development and Regulation) Bill needs parliament's approval to become a law.
Microlenders have been accused of aggressive lending and recovery practices and high interest rates, which attracted calls for regulation.
India's once-thriving microfinance sector was devastated by a crackdown more than a year ago by the government of Andhra Pradesh, which was the industry hub and largest market.
The state rules resulted in a drop off in loan collections and a drying up of funding for microlenders.
(Reporting by Nigam Prusty; editing by Malini Menon)
Trending On Reuters
Prime Minister Narendra Modi will let executive order making it easier for businesses to buy land lapse on Monday after failing to win support from opposition parties in a major blow to his economic reform agenda. Full Article