The Karnataka General Assembly on Monday passed the Karnataka Micro-Loans and Small Loans (Prevention of Mandatory Action) bill, which is intended to replace an earlier decree to protect recovery agents from harassment (MFIS) by unauthorized and unregistered micro-limited agencies (MFIS).
To further protect the interests of poor loanes, the Assembly passed three bills – the Karnataka Pawn Brokers (Amendment) Act, the Karnataka Currency Lenders (Amendment) Act and the Karnataka prohibits the charges for high interest (Amendment).
Exemption from cooperative banks
Drive the bill to replace the decree, according to the recommendation of Cooperation Minister Kn Rajanna, the Minister of Law and Parliament HK Patil proposed an amendment to exempt cooperatives/banks and Souharda institutions and banks from being guided by strict norms to exempt cooperatives/banks and Souharda institutions and banks.
Mr Patil said the legislation was intended to instill the necessary conditions for confidence in the loan and to prevent the recovery agent from showing in unknown powers after the recent suicide of 15 defaulters.
He said the study showed that unregistered microfinance companies have loans of Rs 4,000 crore in the state. “It’s just black money issued,” the minister said, noting that they are charging high interest rates that even hit 120% per year and 10% per month.
He said the poor were actually caught by such lenders. “Poor vegetable suppliers get loans from such private unregistered lenders every day and then buy vegetables in the morning for sale. If they borrow Rs 5,000, the lender deducts Rs 500 and gives them only Rs 4,500. Vegetable suppliers have to refund Rs 5,000 at the end of the day. Patil said: “This calculates Rs 500 or 10%. ”
He also said there will be between 10 and 20 motorcycles in front of the donor’s house because they illegally evacuated the vehicles from the defaulters without giving them time to pay installments.
“Show Commitment”
R. Ashok, the leader of the opposition at the conference, believed that simply introducing legislation would not help solve the problem. He urged the government to show political commitments to oppose illegal donors.
Arvind Bellad, the opposition’s deputy leader, tried to link the issue to the corruption in the police department. He claimed that the police were companions with such unauthorized donors’ palms, and he insisted that if the government ensures that the police transfer without any money involved, the problem would be resolved.
Three other bills recommend that the imprisonment clauses and fines for donors and pawn shops be added if norms related to interest rates and recovery methods are violated.
publishing – March 10, 2025 at 08:44 pm
