Microfinancing harassment: Ready to incorporate suggestions by Guv, says K’taka govt
Bengaluru: The Congress-led Karnataka government on Wednesday said that it is ready to incorporate suggestions made by Governor Thaawarchand Gehlot in connection with the Ordinance promulgated by the state government to tackle the high-handedness of microfinancing institutions (MFIs) in the state resulting in suicides and desertion of people in rural areas.
Addressing reporters, Home Minister G. Parameshwara said: “The Governor is expected to make a decision on the Ordinance regarding MFIs after consulting legal experts. We anticipate that this will be done today. So far, there is no information regarding the Governor requesting changes to the Ordinance. If he suggests any modifications, they will be adopted immediately, and the Ordinance will be sent back for his approval.
“The fine amount has been increased to Rs 5 lakh so that offenders feel the full force of the law. We cannot enact a law just for the sake of it; to have a real impact, both the imprisonment provisions and the fine amount have been increased. The objective is to create a strong deterrent to prevent incidents of suicide and harassment.”
The Karnataka Home Minister further said: “The delay in issuing the Ordinance was to ensure that microfinance companies do not get an opportunity to challenge the law in court, which could result in a setback for the government. We discussed the matter in detail, and the Chief Minister directed the Law Department to take all necessary precautions.
“The delay was made with this consideration in mind. The draft has been prepared carefully, taking all factors into account. We believe the government will not face any setbacks. The draft has been finalised accordingly.”
Meanwhile, considering the debate surrounding harassment leading to disastrous consequences in the state, the Microfinance Industry Network (MFIN) has issued advertisements prominently in newspapers publishing the names of the registered MFIs regulated by the Reserve Bank of India (RBI) in the state.
The MFIN has appealed to those who availed loans to consult the MFI for any grievance and if they do not find a solution, they can call the MFIN toll-free number (1800 102 1080). The MFIN has also appealed to the people to not feel panicked by the news related to microfinance companies in general.
The MFIN has also published the guidelines and framework under which MFIs operate as per the RBI guidelines including not adopting any forceful measures, threatening, abusive methods, harassment of relatives of customers.
A series of incidents of suicides and desertion of homes are being reported from across the state, forcing the state government to promulgate an Ordinance to regulate the MFIs, which are not regulated by the RBI and operate without licenses.
