
BENGALURU: Home Minister Dr G Parameshwara said on Friday that the law to control harassment of people by microfinance firms is expected to be ready within two days. The new law was discussed with CM Siddaramaiah and the concerned minister.
Parameshwara stated that they are bringing in a comprehensive law to safeguard borrowers facing harassment. “The lenders might go to court. We discussed this and other issues to protect people,” he added. He explained that there are many laws related to microfinance firms. “The CM directed us to review these laws and form new legislation to safeguard borrowers. We will finalise it in the next two to three days,” he said.
He added that the CM has directed the law and parliamentary affairs secretaries to look into the new law, and they are expected to act soon. “Unable to face harassment from microfinance companies, borrowers are committing suicide or leaving town. This has to stop. The new, strong law is the solution,” he said.
He also mentioned that in his constituency of Tumakuru, a borrower had taken a loan of Rs 2.5 lakh, for which he had already repaid Rs 4.5 lakh. “The lender not only locked the borrower’s house but also painted on the house that the borrower still had to pay Rs 80,000, just to embarrass them. When I learned about it, I sent the SP to the spot, and a case was registered against the lender. We ensured that the wall of the house was repainted and the borrower got back his home. Such cases must be stopped,” he said.
He pointed out that in Karnataka, Rs 59,000 crore has been given out by such lenders. “We are not focusing on that. We are focusing only on controlling harassment of people. We have learned that these microfinance companies might go to court. Our law should be strong enough to stop them from doing so. We discussed this too in our meeting,” he added.
Siddaramaiah said on Friday that microfinance companies are giving out loans at exorbitant annual interest rates of 28-30%. “They are sending rowdies to recover loans. These microfinance companies come under the central government and operate according to RBI guidelines. We are bringing in a law to control harassment by these companies by issuing an ordinance,” he said.