Profits in the micro Finance sector are good but not too much, said Raghuram Rajan, Governor, RBI addressing the National Microfinance Conclave organised jointly by NABARD and SIDBI at NABARD Head Office, Mumbai today.

He further said that the 4 'A's (Accounts, Aadhar, Access to finance and Activity in the account) and 5 'P's (Products, Place, Price of the product, Protection of consumers and Profit to the lenders) can create a vibrant financial market for the poor.

He stated that RBI is working on the guidelines for small finance banks which will be issued by month end.

He asked the micro Finance community to reflect on important issues like Consumption Vs Production Credit, ability of micro Finance to create livelihoods, micro Finance vs money lenders among others and asked NABARD & SIDBI to make the gist of these important deliberations widely available to the practitioners. The Governor further stated that loan waivers and subsidies distort the credit discipline.

H K Bhanwala, Chairman, NABARD said, "This is for the first time in the recent history that NABARD & SIDBI have joined hands to promote a vibrant micro Finance Industry."

He emphasised upon the Pancha Sutraof the SHG Bank Linkage Program namely regularity in meetings, savings, inter loaning, repayment of credit and book keeping. He launched the pilot project on Digitisation of SHG Bank Linkage Programme which involves launching of e-book keeping which will simplify the accounting at the SHG level. E-book keeping will initially be launched in Wardha district of Maharashtra and Ramgarh district of Jharkhand and soon will be extended to 10 districts across 10 states of India.

N K Maini, deputy managing director, SIDBI said that MFIs are playing an important role in serving the poor and SIDBI has always been supportive of the micro Finance industry and has promoted several innovations.