Should NABARD be Micro Finance Regulator?

NABARD is a key participant in the micro finance sector and has been closely associated with one of the two prevailing modes i.e. SHG-bank linkage mode of delivery of micro finance services. The developmental role envisaged in the Micro finance Bill for this institution will further strengthen its role as service provider. Combining the role of service provider and regulator is not good governance practice as it could lead to serious conflict of interest.