Akula urges banking correspondent status for MFIs

The Reserve Bank of India (RBI) should allow micro finance institutions and non banking finance companies to operate as banking correspondents (BCs) to expand the scope of financial inclusion, Vikram Akula, founder and chairperson, SKS Microfinance said.

The Reserve Bank of India (RBI) should allow micro finance institutions and non banking finance companies to operate as banking correspondents (BCs) to expand the scope of financial inclusion, Vikram Akula, founder and chairperson, SKS Microfinance said.

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The central bank has banned MFIs and NBFCs from operating as banking correspondents as it argued that there is a conflict of interest.

“RBI cannot abdicate its responsibilities just because there is a problem in hand, it needs to address the problem,” Akula said at the India Economic Forum on Tuesday.