CM: No bail for moneylenders who harass

NT Correspondent

Bengaluru: Karnataka Chief Minister Siddaramaiah has disclosed that the new microfinance law would impose nonbailable cases to be filed against offenders who try to recover money from defaulters in an “inhumane manner”. He added that there would be a provision for appointment of ombudsman to assess if the money lenders were being fair in their recovery of loans. An ombudsman is an independent and neutral official who assesses complaints.

“More power will be devolved to the police under this law. Ombudsmen will be appointed. There will be a provision for non-bailable cases, jail terms and fines against those who try to recover loans forcibly and in an inhumane manner,” Siddaramaiah said. The CM had also declared that there would be an ordinance on the same and that the existing laws would be amended to crack down on harassment of defaulters who failed to make payments to micro-finance companies who were exceeding the upper limit for interest rate of 17.07 per cent fixed by the Reserve Bank of India (RBI).

More than a couple of dozen people have reportedly died of suicide due to alleged harassment of some of these micro-finance companies in the past few months. In the second week of January, it came to light that hundreds of families had fled their villages in Chamarajanagar district. The reason the people cited was harassment and abuse of defaulters by microfinance institutions. Residents of Heggavadipura village in the district alleged that institutions had been lending money at an exorbitant 24 per cent interest rate.