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NEW DELHI/MUMBAI, Nov 22 (Reuters) - Bank funding to the entire microfinance industry in India has diminished following a regulatory clampdown on the sector, said Indian rating agency CRISIL, which put 12 microfinance firms under watch with negative implications.
However, risk to Indian banks' non-performing loans from their exposure to MFIs is not material at this stage, Pawan Agrawal, a director at CRISIL, an unit of Standard & Poors, told Reuters in an interview on Monday.
India's fast-growing, largely unregulated microfinance industry, which surged to prominence when George Soros-backed SKS Microfinance SKSM.BO raised $358 million in an IPO, is facing a regulatory clampdown that could erode profits and hurt growth. [ID:nSGE69I0CW] (Reporting by Anurag Kotoky and Arjun Kashyap; Editing by Aradhana Aravindan)