Based on the recommendations of which Committee was the creation of a separate category for NBFCs operating in the microfinance sector (NBFC-MFI) done?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. Malegam Committee.
The creation of a separate category for Non-Banking Financial Companies (NBFCs) operating in the microfinance sector, known as NBFC-MFIs, was based on the recommendations of the Malegam Committee. The committee, formed by the Reserve Bank of India (RBI) in 2010, was tasked with studying issues related to microfinance and suggesting regulatory measures. The Malegam Committee's recommendations aimed to bring more transparency, accountability, and consumer protection to the microfinance sector, leading to the establishment of the NBFC-MFI category.