Reserve Bank of India's former deputy governor HR Khan will take charge as the first chairman of the steering committee of Code for Responsible Lending (CRL) in microfinance on December 1, a person familiar with the development said.
MFIN wanted a heavyweight for this CRL project, which is a self-regulatory step for a diverse set of lenders engaged in microfinance such as banks, small finance banks, non-banking financial companies (NBFC), NBFC-MFIs and not-for-profit firms.
So far, 97 entities have signed the code which has proposed to cap the total indebtedness of a borrower to Rs 1 lakh and bar more than three lenders offering loans to a single borrower.
Four banks -- Axis Bank, Kotak Mahindra Bank, ICICI Bank and IndusInd Bank have signed the code. Others who have agreed to follow the code include 76 NBFC-MFIs, four small finance banks, two NBFCs and 11 not for profit firms.