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The Finance Minister, Shri P. Chidambaram, said that micro-finance institutions (MFIs) require infusion of new capital and, therefore, he proposed to redesignate the existing Rs.100 crore Micro-Finance Development Fund as Micro Finance Development and Equity Fund and increase the corpus to Rs.200 crore. He said the fund would be managed by a Board consisting of representatives of NABARD, commercial banks and professionals with domain knowledge. Shri Chidambaram said that the Board would be asked to suggest suitable legislation Bill and a draft bill would be introduced in the next fiscal year.
The Finance Minister also proposed that the Reserve Bank of India would open a window to enable qualified NGOs engaged in micro-finance activities to use the External Commercial Borrowing (ECB) window. He said that detailed guidelines containing necessary safeguards would be issued by RBI.
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