. this will further ensure that access to institutional microcredit also enables the borrowers to explore opportunities for generating income in a sustainable manner, besides meeting their immediate needs for money. concluding remarks mfin has been instrumental in multiple initiatives to strengthen the sector during the decade and to develop the microfinance ecosystem. the current mfin microfinance review report provides data - supported insights, and it has been enriched with mfin's experience. the report discusses in detail the organic evolution of the microfinance sector and the supporting ecosystem leading up to the new regulations. my compliments to mfin and the whole team for bringing out this report. it has been our constant endeavor to support microfinance sector by addressing regulatory gaps and arbitrage arising from differential regulations across the spectrum of entities. towards this objective, we have introduced structural changes by revamping the regulatory framework for microfinance loans in march 2022. we would like to see through its successful implementation on ground before taking further steps. let me again say, albeit at the cost of repetition, that customer protection lies at the core of microfinance regulation, and it has been our guiding light while revamping the regulatory regime for the microfinance sector. we have attempted to move from a rulebased approach to a principle - based approach thus creating enabling environment for more financial institutions to serve the excluded, while protecting their interests through competition and transparency. i am hopeful that these regulatory reforms will provide the requisite impetus for the long but immensely fulfilling journey towards an inclusive and responsible microfinance sector. thank you. micro finance : empowering a billion dreams - available at https : / / www. rbi. org. in / scripts / bs _ speechesview. aspx? id = 1137 2 as on june 30, 2022. all data points in this speech, unless specifically mentioned, are from micrometer : a quarterly publication of mfin. 3 one out of two entities which was granted approval for starting a universal bank in 2014 was an nbfc - mfi, while eight out of ten entities granted approval for starting small finance banks in 2016 were nbfc - mfis. 7 / 7 bis - central bankers'speeches

for engagement of recovery agents and a dedicated mechanism for redressal of recovery related grievances. while we acknowledge the rights of the lenders to recover overdue loans, i would like to make it clear in no uncertain terms that the reserve bank has zero tolerance for misconduct towards the borrowers. you would agree that exclusive focus on business growth and bottom lines without considering the vulnerabilities of the borrowers by any entity is fraught with pitfalls. irresponsible lending by a few lenders ends up putting the interests of entire industry at risk. therefore, it is the collective responsibility of all the lenders and the sros to keep a check on any sharp and aggressive practices in the sector. there are sufficient avenues in the microfinance sector to grow the business as availability of credit to last mile still remains an unfinished agenda. the industry should work towards increasing the size of pie while balancing the interests of the vulnerable borrowers. in this regard, i am happy to note that the revamped code of conduct ( coc ) was recently launched on 4th october 2022. the code of conduct is as an industry - led initiative with primary focus being to promote and advance'responsible lending'practices for protection of customers. the seven elements enumerated in the code, viz., fair interaction, suitability, education & transparency, information & privacy, grievance redressal, employee engagement, and customer communication essentially capture the range of issues which the revised framework also encapsulated. however, as for any voluntary regulation to work as intended, it is incumbent upon all the players to adhere to the code both, in letter and spirit. going forward, there is a strong case for adoption of technology in the microfinance sector to not only improve efficiencies and bring down the operational costs but to also mitigate operational risks such as frauds, enhance service experience and create customer awareness. leveraging of digital solutions can enable the microfinance lenders to increase their productivity manifold across the entire lending cycle. microfinance lenders with their high - touch models are best placed to handhold their customers for developing familiarity with technology which will enhance their awareness about the opportunities available to them. this way, the lenders can go beyond a transactional arrangement of just meeting the credit needs of the borrower to a transformational relationship with the customers resulting in positive externalities in 6 / 7 bis - central bankers'speeches terms of the social benefits