Indian legislation to regulate microfinance sector

On February 22, 2007, the Union Cabinet (India) gave its approval for enactment of a Legislation on the Micro Financial Sector (Development and Regulation) subject to amendments of drafting or of a consequential nature, if any, in consultation with the Legislative Department. According to the press release issued by the Ministry of Finance,

The Legislation will provide a legal framework for the entities engaged in micro finance and facilitate an environment for development of micro finance services in the country with greater transparency, effective management and better governance. This will facilitate the flow of micro finance services to the un-banked population of the country.

Frontline's March 10-23, 2007 issue discusses the proposed bill and the opposition mounting against the draft being discussed.