CODE FOR RESPONSIBLE LENDING (CRL)

Related Topic in KAS Prelims Syllabus:

Economy [Paper-II]: Recent fiscal and monetary policy issues and their impact, structure of Indian Banking and Non- Banking Financial Institutions and reforms

News

Former deputy governor of the Reserve Bank of India (RBI), H R Khan was appointed as the first chairman of the steering committee of the Code for Responsible Lending (CRL) in micro-credit.

What is CRL?

• It is a self-regulatory step for the micro-credit industry making diverse entities like banks, NBFC-MFIs and NBFCs adhere to standards of customer protection.
• It aims to ensure uniform principles for customer-conduct in micro-credit. It is sector-specific and entity agnostic.
• It was launched in September 2019 by MFIN and Sa-Dhan, an RBI-recognised association of Micro Finance Institution (MFIs), along with Finance Industry Development Council (FIDC), an association of NBFCs.
• CRL was envisaged to be guided and supervised by a steering committee representing banks, Small Finance Banks, NBFC-MFIs, NBFCs and industry associations under an eminent independent chair.