New Paradigm It is clear that the dominant theme so far has been of extending micro-credit through Bank-SHG linkages, with NABARD playing a leadership role and micro-finance institutions, mainly NGOs, playing a catalytic as well as enabling role at the gross root level. However, there is clearly an emerging new paradigm in the approach to micro-finance.
The Reserve Bank has taken timely steps to moderate recently observed high growth in bank credit and has also imposed enhanced provisioning and risk-weights for select sensitive sector exposures to assure desired quality in bank-lending. Way forward, it is recognised by us that extreme sensitivity to risks in financial institutions and financial markets is desirable, both on account of domestic factors and global uncertainties.