Siddaramaiah (ANI)
In response to growing public outrage over alleged harassment by microfinance companies, Karnataka Chief Minister Siddaramaiah announced plans to amend existing laws and introduce new legislation to safeguard borrowers' interests. The announcement followed an emergency meeting chaired by Siddaramaiah, attended by Deputy CM D.K. Shivakumar, Revenue Minister Krishna Byre Gowda, Home Minister G. Parameshwara, Law Minister H.K. Patil, senior government officials, police authorities, representatives of microfinance associations, and officials from the Reserve Bank of India (RBI) and NABARD.
During the meeting, the Chief Minister acknowledged the distress caused by unethical recovery practices. He emphasized that while the government does not oppose loan disbursement or recovery, harassment of borrowers will not be tolerated. "After taking their view, we told them that we won't say not to give loans or recover money from borrowers, but while recovering money, you should not torture and harass people," Siddaramaiah stated.
He urged microfinance institutions to adhere strictly to RBI guidelines when collecting dues and called on the RBI to monitor and address violations.
Siddaramaiah announced the government's plans to amend laws and introduce new regulations aimed at protecting borrowers. He warned microfinance companies against charging interest beyond prescribed limits and prohibited loan recovery efforts after 5 PM. The Chief Minister also opposed outsourcing recovery operations, citing the involvement of rowdy elements in such practices.
"We will take stringent action against any violations in loan recovery processes," Siddaramaiah warned.
The meeting was convened after reports of suicides, families fleeing their homes, and protests by women in rural areas against harassment by microfinance companies. Siddaramaiah assured the public that the government is committed to addressing these issues and ensuring the safety and dignity of borrowers.
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