The policy attached importance to the work of National Bank for Agriculture and Rural Development (NABARD) and public sector banks in the area of micro-credit. It announced total deregulation of interest rates on loans by banks to micro-credit organisations and by these organisations to their members and beneficiaries except in the case of government sponsored programmes.
Dr. Jalan, as Governor, continued to focus on this subject virtually in every one of his Annual and Mid-term Review of policy statements. In all these statements, the basic objective has been of mainstreaming micro-credit and accelerating the flow of bank credit to micro-finance institutions without jeopardising their decentralised, voluntary and nonbureaucratic character.