BJP Accuses K'taka Govt of MFI Mismanagement

Synopsis

Former Karnataka CM Basavaraj Bommai has charged the Congress-led government with failing to regulate microfinance institutions (MFIs), leading to significant harassment of vulnerable individuals. He has called for stricter controls and accountability in the sector.

Key Takeaways

Basavaraj Bommai's accusations against the state government.
Extreme measures by MFIs affecting vulnerable citizens.
Call for lifting the stay on previous legislation regulating MFIs.
Government's acknowledgment of the issue.
Need for preventive measures against MFI exploitation.

Hubballi (Karnataka), Jan 23 (NationPress) The former Chief Minister of Karnataka and BJP MP Basavaraj Bommai has criticized the Congress-led state administration for failing to oversee microfinance institutions (MFIs), resulting in significant harassment of at-risk citizens.

Speaking to reporters on Thursday, Bommai claimed that microfinance entities have resorted to drastic actions, such as forcibly confiscating even mangalsutras from women. He asserted that this exploitation has led families to flee their homes, with some tragically taking their own lives.

"The government is unable to uphold the law. These institutions operate without fear, enabling unruly elements to conduct collections," Bommai stated.

He criticized the government for its mixed messages, pointing out that while it professes to endorse women-focused initiatives, it fails to address the harassment inflicted by certain microfinance firms.

Bommai recalled legislation introduced during H.D. Kumaraswamy's term aimed at regulating high-interest lending practices. However, that law was halted by the courts. He urged the current administration to take actions to lift the stay, enforce strict regulations, and regain oversight of this sector.

In a parallel response, Karnataka Home Minister G. Parameshwara acknowledged the crisis, indicating that the Finance Department needs to take action against MFIs operating unlawfully.

“We are not completely informed about unlicensed microfinance firms in the state, but the Finance Department must step in,” Parameshwara stated on Wednesday. He assured that complaints from those affected would lead to swift action and inquiries.

The minister also highlighted recent cases related to MFI harassment. “A woman in Tiptur town of Tumakuru district ended her life due to MFI harassment. Similar incidents have been reported in and around Tumakuru. We have opened cases and begun legal proceedings,” he said.

Parameshwara emphasized the necessity for preventive actions but conceded that proactive monitoring is difficult. “Guidelines exist for microfinance operations, but breaches, particularly by unregistered companies, create issues. Unsuspecting individuals often invest their savings and become trapped. Whenever such violations are brought to our attention, we will respond decisively,” he added.