28 April 2020

On the Indian Context many SFBs (Small Finance Banks) have welcomed the decision taken by RBI(Reserve Bank of India) and have allowed a grace period of 90 days to the clients. On this context I would say that SFBs are in a better commanding position than MFIs due to their deposit base which would provide a sustainability during the crisis period however we have to keeping mind few things
1) Communication of the grace period to the beneficiaries.
2) Prevention of frauds against persons impersonating as employee and collecting repayment.
3) Strong account keeping (in case there is a reduction in repayment rate then all small transactions and NPA accounts to be carefully monitored ).
4) Providing small amount of emergency to clients so that they can manage their expenses during initial months of financial stress.