BANKING AFFAIRS

Detailed explanation-1: -It may be recalled that the Reserve Bank of India in October 2010 set up a Sub-Committee of its Central Board of Directors to study the issues and concerns in microfinance sector, under the Chairmanship of Shri Y H Malegam, a senior member on the Reserve Bank’s Central Board of Directors.

Detailed explanation-2: -Y. H. Malegam Committee is an expert committee constituted by the Reserve Bank of India in February 2018 to look into: Rising incidents of fraud. The effectiveness of audits. And classification of bad loans.

Detailed explanation-3: -The Board of Directors of the Reserve Bank of India, formed a Sub-Committee of the Board to study matters and concerns in the microfinance sector in so far as they are related to the entities regulated by the Bank. The Sub-Committee was under the chairmanship of Y.H. Malegam.

Detailed explanation-4: -The minimum requirement of microfinance loans for NBFC-MFIs also stands revised to 75 per cent of the total assets. 8.2 Under the earlier guidelines, an NBFC that does not qualify as an NBFC-MFI, cannot extend microfinance loans exceeding 10 per cent of its total assets.

Detailed explanation-5: -This method was originally suggested by the P.J. Nayak Committee for the Small Scale Industries in India in need of working capital from banks. According to this method, the working capital requirement of the MSME unit is calculated at 25% of annual projected turnover.