Amid growing criticism over the use of coercive ways of micro financial institutions (MFIs) to recover loans, the RBI said its sub-panel looking into the functioning of such lenders will submit its report in three months.

'The Sub-Committee will submit its report in three months,' the Reserve Bank said in a statement.  

The RBI has set up a sub-committee of the central board of directors of the central bank to study the issues and concerns of the microfinance sector, including interest rates charged by the lenders in this area.

'Y H Malegam, a senior member on the Central Board of Directors of the Reserve Bank of India will chair the Sub-Committee,' it added.

The RBI further said that there have been some concerns expressed in the media about high interest rates, coercive recovery processes and multiple lending practised by some microfinance institutions.

The Reserve Bank regulates only those MFIs which are registered with it as non-banking finance companies (NBFCs). However, it does not prescribe lending rates for these institutions, it added.