Karnataka Government To Finalize Ordinance Against Microfinancing Issues
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Synopsis
The Karnataka government is set to finalize an Ordinance to combat the activities of unscrupulous microfinance companies. A high-level meeting led by Home Minister G. Parameshwara will address ongoing harassment of borrowers, with plans for immediate legal action and enhanced powers for local authorities.
Key Takeaways
- Karnataka government to finalize an Ordinance against microfinance companies.
- Meeting includes key ministers and police officials.
- Immediate action against harassment of borrowers is a priority.
- Helpline and increased powers for local authorities proposed.
- Legal penalties for coercive recovery practices will be established.
Bengaluru, Jan 29 (NationPress) The Karnataka government is convening a significant meeting on Wednesday in Bengaluru to finalize the draft of an Ordinance aimed at addressing the challenges posed by unethical microfinancing companies operating within the state.
Home Minister G. Parameshwara, along with Minister for Law and Parliamentary Affairs H.K. Patil, Minister for Revenue Krishna Byre Gowda, and others, will gather at Vidhana Soudha to discuss this pressing issue.
During a press briefing in Bengaluru, Home Minister G. Parameshwara expressed concerns regarding the ongoing harassment of individuals by microfinance companies, despite a previous high-level meeting led by CM Siddaramaiah and a stern warning issued. He remarked, “The police require a formal complaint to take immediate action. We have instructed them to initiate suo motu actions in cases that come to their attention.”
“Today’s meeting aims to consider the draft of the Ordinance. We will examine the tactics employed by microfinance companies and will expedite its submission to the Governor,” stated HM Parameshwara.
He further mentioned, “All Deputy Commissioners (DC) and Superintendents of Police (SPs) have been given directives on this matter. We are committed to managing the situation and will not relent. A dedicated helpline will be established shortly.”
“Our draft proposes to enhance the authority of the Deputy Commissioners and establish a dedicated unit,” HM Parameshwara added.
“We are introducing an Ordinance to act promptly as we cannot postpone until the assembly session convenes.”
When asked about reports of microfinance staff continuing harassment despite CM Siddaramaiah’s orders, HM Parameshwara responded, “Microfinance companies have outsourced recovery tasks, leading to harassment akin to that of goons. CM Siddaramaiah has made it clear that such actions must cease, and strict measures will be taken against these firms.”
“If we finalize the draft of the Ordinance today, we will issue an order immediately. In this context, we have convened a meeting with the Law and Revenue Ministers,” he said, addressing questions regarding the timeline for promulgating the Ordinance.
Karnataka Chief Minister Siddaramaiah held a high-level meeting last Saturday to address public grievances related to microfinance institutions.
At a press conference at Vidhana Soudha following the meeting, Siddaramaiah reiterated the government's commitment to protect the rights of borrowers dealing with microfinance institutions.
He assured that strict legal measures would be enforced against those who intimidate borrowers. A new law will be developed through an ordinance to ensure the protection of borrowers' interests, he stated.
Criminal charges will be pursued against those involved in coercive loan recoveries. The law will also include provisions for voluntary complaint submissions, he added.
