Microfinancing menace: Karnataka govt to hold meeting to finalise draft of Ordinance

Bengaluru, Jan 29 (IANS) The Karnataka government is holding a high-level meeting on Wednesday in Bengaluru to finalise the draft of the Ordinance to crack down on unscrupulous microfinancing companies in the state.

Home Minister G. Parameshwara, Minister for Law and Parliamentary Affairs H.K. Patil, Minister for Revenue Krishna Byre Gowda and others will hold the meeting in Vidhana Soudha and deliberate over the matter.

Speaking to reporters in Bengaluru, Home Minister G. Parameshwara, commenting on the trend of microfinance companies harassing people even after the high-level meeting conveyed by CM Siddaramaiah and a strict warning being issued, stated, “The police need a complaint to take steps immediately. We have also given directions in this regard to take suo motu action if cases come to their knowledge.”

“Today we are holding a meeting to deliberate on the draft of the Ordinance. We will discuss about the traps by the microfinance companies and we will soon send it to the Governor,” HM Parameshwara stated.

HM Parameshwara added, “All Deputy Commissioners (DC) and the Superintendent of Police (SPs) have got instructions in this regard. We will control the situation and won’t leave. A helpline will be started soon.

“In our draft, we are considering to give more powers to the Deputy Commissioners and the establishment of a separate wing.”

“We are bringing an Ordinance to act immediately as we can’t wait till the convening of the session.”

When asked about microfinance company staffers continuing to harass in spite of the CM’s orders, HM Parameshwara stated, “The microfinance companies have outsourced the responsibilities of recovery. They are in turn harassing people and acting like goondas. CM Siddaramaiah has told the companies even this should not be done and action will be initiated against such microfinance firms.”

“If the draft of the Ordinance is finalised today, an order would be made tomorrow itself. In this background, we have called a meeting of the Law and Revenue Ministers,” he said answering a question on when the Ordinance would be promulgated.

Karnataka Chief Minister Siddaramaiah on last Saturday held a high-level meeting on the issues faced by the public due to microfinance institutions.

Addressing the press conference at Vidhana Soudha after the meeting, Siddaramaiah announced that the government is committed to protecting the interests of borrowers who take loans from microfinance institutions.

Strict legal action will be taken against those who harass borrowers. A new law will be formulated soon through an ordinance to safeguard borrowers' interests, the CM stated.

Criminal cases will be filed against those involved in forced loan recovery. The law will also provide provisions for filing complaints voluntarily, he said.