On 20th March 2007, the Union Government introduced the Micro Financial Sector Development and Regulation Bill 2007 in the Lok Sabha – the lower house in the parliament of India. If passed, this bill may change the way in which microfinance is practiced in this country – and possibly in a way that will not be beneficial to the microfinance sector. This note is an attempt to provide an overview of the bill and point out potential perplexities that would arise as a result of it.