Kolkata, May 8 (IANS) Bangladesh Bank Governor Atiur Rahman Tuesday emphasised the need for strong regulation for monitoring micro-finance institutions.
"We are striving to maintain the right balance of ensuring that micro-finance institutions (MFIs) have the space to innovate while maintaining oversight of poor people's money," said Rahman, who heads Bangladesh's central bank, at an interactive session organised by Bandhan Financial Services here.
The Bangladesh government had set up the Micro-credit Regulatory Authority (MRA) in 2006 to monitor operations of MFIs.
"We set up the MRA to achieve this balance and we aim to strengthen its capacity further," said Rahman, who is also the chairman of MRA.
He said large and medium MFIs needed to be regulated first as any problem with these could impact the whole micro-finance industry.
On the regulatory environment for MFIs in India, Rahman said the Reserve Bank of India, which had earlier given some autonomy to MFIs, was now looking at regulating them.
"Even in Bangladesh, initially these MFIs were given autonomy to operate. However, now we have set up a separate regulatory authority to supervise the industry," he added.