Karnataka Minister: Current Laws Fail to Curb Microfinance Firm Abuses
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Synopsis
Karnataka's Home Minister G. Parameshwara criticized the current laws as ineffective against the alleged abuses by Microfinance Institutions (MFIs), which have reportedly led to tragic incidents, including suicides. The government plans to amend the legislation to address these ongoing issues.
Key Takeaways
- Existing laws fail to address MFI abuses.
- The Congress government plans to amend legislation.
- Numerous complaints have been filed statewide.
- Victims' families demand government intervention.
- Officials are instructed to take necessary actions.
Bengaluru, Jan 24 (NationPress) In light of recent incidents of suicides attributed to alleged mistreatment by Microfinance Institutions (MFIs), Karnataka Home Minister G. Parameshwara stated on Friday that the current legislation is inadequate in addressing the highhandedness of these firms operating within the state.
During a media briefing in Bengaluru, Parameshwara remarked, "Complaints about the harassment by MFIs have surfaced statewide. It has come to our attention that existing laws are ineffective."
The Congress government intends to amend the law, he emphasized.
Parameshwara also mentioned, "According to bank regulations, there exists a law for loan recovery and protection. Reports from our department indicate that the laws are not only ineffective but also lack the necessary rigor to address this issue."
"In the future, it is essential to establish strict regulations governing MFIs, and the Congress-led government will take action to develop laws in this regard. Meanwhile, concerning the ongoing harassment, we have directed officials to take appropriate measures," he added.
"In recovery scenarios, loans are provided after obtaining undertakings from borrowers. You are aware that banks require numerous signatures for loan approval. The purpose of these signatures often remains unclear to customers. This serves as a commitment, and on this basis, companies conduct house raids, seize properties, and take further actions. A legal resolution is necessary," Parameshwara explained.
"Law Minister H.K. Patil has also noted this situation, and Chief Minister Siddaramaiah has made a statement on the matter. In the upcoming days, we will amend the existing law. The Chief Minister has convened a meeting to discuss reported cases and the inadequacies of current laws to address the issue," he stated.
The widow of a man who took his own life sent her mangalsutra to Parameshwara on Thursday, demanding action against the personnel of a microfinance firm allegedly responsible for her husband's death.
Numerous women from Haveri district also sent their mangalsutra to Siddaramaiah, urging him to intervene regarding the harassment by MFIs.
Sources confirm that Siddaramaiah has scheduled a meeting to address this issue on January 25 in Bengaluru.
Reports indicate that Deputy Commissioners' offices across the state are inundated with petitions seeking government intervention to halt the harassment perpetrated by microfinance firms.
Union Minister H. D. Kumaraswamy, Leader of the Opposition R. Ashoka, BJP State President B. Y. Vijayendra, and former Chief Minister and BJP MP Basavaraj Bommai have criticized the Congress-led state government for losing control over MFIs, resulting in widespread harassment of vulnerable populations.
