K’taka govt to implement stronger law against microfinance menace
Bengaluru: Karnataka government on Thursday conveyed the second high-level meeting on issues faced by the public due to the highhandedness of microfinance institutions.
The meeting was chaired by Chief Minister Siddaramaiah where it was decided to review the provisions of the proposed Ordinance and implement a stronger law.
“A decision has been made to review the provisions of the ordinance formulated to prevent harassment by microfinance institutions and to implement a stronger law as soon as possible. A team of senior officials from the Law and Finance Departments will be formed for this purpose,” said Siddaramaiah.
He added that it was also decided that the law must be completely constitutional and free from any loopholes, adding that a strong law is being drafted to prevent the harassment faced by borrowers and to regulate forced recoveries by lenders.
“The law will grant greater authority to the police. Ombudsmen will be appointed, and strict punishments, including non-bailable offences and heavy penalties, will be imposed on those who engage in inhumane and forceful loan recoveries,” the Chief Minister said.
He further assured that a stringent law is being enforced to prevent harassment by unregistered moneylenders.
“The existing legal framework already has provisions to control harassment by microfinance institutions. The question arises as to why they are not being effectively implemented. The police must take suo motu action and register cases without waiting for complaints,” he said.
A series of incidents of suicide and harassment were reported across the state due to the alleged harassment by microfinance companies.
A female teacher committed suicide by jumping into a river, allegedly due to harassment by microfinance staffers in Karnataka’s Davanagere district, said officials, adding that her body was found on Tuesday.
The victim has been identified as Pushpalatha, who had gone missing on January 26.
In another incident, a man reportedly died of a heart attack allegedly caused by harassment from microfinance staffers in Tumakuru district. The deceased has been identified as Syed Samiulla.
Following his death, Samiulla’s wife, Tabassum Banu, pleaded with the authorities for help. She alleges that the staffers are now targeting her, and this harassment could push her and her children to consider suicide.
A woman in the Mysuru district of Karnataka committed suicide fearing torture by the microfinance company staffers. Mysuru is the native district of Chief Minister Siddaramaiah. The incident was reported from Ambale village in Mysuru district and the deceased was identified as 53-year-old Jayasheela. The police on January 27 said the woman had ended her life by consuming poisonous tablets.
Earlier, Chief Minister Siddaramaiah held a high-level meeting on the issues faced by the people due to microfinance institutions.
Addressing the press conference at Vidhana Soudha after the meeting on January 25, the Chief Minister announced that the government was committed to protecting the interests of borrowers who take loans from microfinance institutions