BENGALURU: The Karnataka government has directed banks not to adjust the Rs 2,000 monthly assistance provided to women under the Gruha Lakshmi scheme against outstanding loan instalments, interest or other dues, and ordered the immediate refund of amounts deducted without the beneficiaries’ written consent.
Additional Chief Secretary and Development Commissioner Uma Mahadevan has issued strict instructions to the State Level Bankers’ Committee (SLBC) convenor to ensure that all commercial banks, cooperative banks, regional rural banks and other financial institutions comply with the directions.
The move follows an appeal by MLC and State Vice-President of the Guarantee Schemes Implementation Authority Dinesh Gooligowda to Chief Minister D K Shivakumar, highlighting complaints from women beneficiaries about banks deducting the scheme’s assistance towards repayment of old loans.
Following the CM’s directives, the State Government has asked the SLBC convenor to issue a circular to all banks and ensure that the amount credited under the scheme is not automatically debited or adjusted against loan dues. Banks have also been asked to put in place the necessary technical measures to prevent such deductions and issue clear instructions to branch-level staff.
The State Government has further directed banks to re-credit amounts already deducted towards loan dues without the beneficiaries’ explicit written consent. Directives have also been issued to the chief executive officers of zilla panchayats in this regard.
The SLBC convenor has been asked to ensure strict compliance by all financial institutions and submit an action-taken report to the government. Copies of the communication have been sent to the Women and Child Development Department Secretary, Deputy Commissioners and ZP CEOs.
In his representation to the CM, Gooligowda had argued that deductions by banks and microfinance institutions defeated the scheme’s objective of supporting women’s household expenses, children’s education and financial independence.
He had also sought strict action against private finance institutions allegedly resorting to coercive loan recovery practices, including threats to beneficiaries. He had urged the State Government to ensure refunds of unauthorised deductions and asked DCs and Superintendents of Police to monitor complaints.