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Through the scanner darkly

India’s booming microfinance segment is under the scanner, with the Reserve Bank of India (RBI) issuing a veiled warning that it could be taken off the priority sector lending list of banks if the industry fails to improve its governance standards… The RBI officials reportedly told MFI executives that the central bank was aware of the extent of benami loans being given by MFIs, the practice of writing off bad loans and sloppy corporate governance in some of the entities…

More here.

update: a couple of months later, these questions about corporate governance rose to a higher pitch when the bosses of sks microfinance decided to sell their shares in the company before its IPO. Also see this. And this.

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