In exercising its role as a Regulator, MFIN seeks to ensure that proper checks and balances are put in place by Members and that they comply with the Reserve Bank of India’s regulations as well as the industry Code of Conduct. These checks and balances include surveillance, investigation, enforcement, and follow-up on violations. In performing this oversight role, MFIN performs random spot checks in case any deviant patterns are thrown up.
Responsible Business Index
The Responsible Business Index is a self assessment tool all Members use to draw up a compliance and performance score card. It collectively assesses Members’ business principles, policies and practices. It is a tool to help individual NBFC-MFIs to systematically measure, manage and integrate Responsible Business Practices through Gap analysis, Benchmarking and Tracking progress.
The index comprehensively covers the Reserve Bank of India’s Fair Practice Code and Industry Code of Conduct under four broad areas which are further divided in 83 sub-parameters to form the maximum total score of 100. The four parameters are:
- Disclosures to customers (weightage 32%)
- Customer engagement (weightage 21%)
- Institutional processes (weightage 38%)
- Transparency (weightage 9%)
RB Index Score Card for 2013-14
- Average industry score of RB:Index 2014 is 87%. Overall the scores reveal a very high degree of compliance to RBI Fair Practices Code (FPC) and the Industry CoC
- Average score is higher (88%) for NBFC-MFIs (34) participating in the exercise for second time as compared to NBFC-MFIs (5) participating for the first time (77%)
- Half of the NBFC-MFIs (19) have score above 90%.
- However, there is scope to improve the institutional process, especially on indicators related to HR, Board and customer engagement related to customer education/rights and welfare
Average industry score for RB:Index and various parameters are as under:
- Overall: 87%
- Disclosure to customers: 90%
- Customer engagement: 86%
- Institutional Process: 85%
- Transparency : 87%
Click here to read and download the detailed Responsible Business Index 2014.