Deputy Chief Minister D.K. Shivakumar on Monday said that the State government will give more powers to the police to curb the torture of the poor by microfinance companies in the name of loan recovery.
The government, which is in the process of promulgating an Ordinance to rein the microfinance companies, has finalised the Karnataka Microfinance (Prevention of Coercive Actions) Ordinance, 2025, after several rounds of meetings. The Ordinance proposes to provide relief to borrowers from coercive action by unlicensed and unregistered microfinance institutions or money lending agencies/organisations. Sources said the Ordinance has been sent to Governor Thaawarchand Gehlot and his approval has been awaited.
Speaking to reporters on Monday, Mr. Shivakumar said: ”Our government will not allow microfinance companies to take the law into their hands and torture the poor using hooligans. We will give more power to the police to handle this.”
On torture continuing in spite of warnings by the government, he said: “Many FIRs have been filed against microfinance companies in Belagavi, Bidar, Mysuru, and Ramanagara. The Chief Minister and the Cooperation Minister have already issued stern warnings in this regard. We have started helplines in every district headquarters. The Chief Minister will hold meetings on this with senior police officials.”
Following a spate of suicides by borrowers of loans from largely unregistered microfinance institutions, the Congress government was under pressure to enforce a law to check undue hardship of usurious interest rates and coercive means of recovery.
‘State govt. debt not high’
Mr. Shivakumar said: “It is important to understand how much debt the Centre has acquired. The State government debt is not high. The Prime Minister alleged that Karnataka will go bankrupt due to the guarantee schemes, but we have sound finances. The guarantee schemes are for the people and not for votes.”
On funds not being released by the Centre for the Upper Bhadra project, he said: “One must keep their word.” Asked if the JD(S) MLAs were in touch with him, he said: “I have not spoken about JDS MLAs. I only said that the JD(S) MLAs must look after their own future. Many JD(S) workers have come forward to join us.”
Published – February 03, 2025 09:10 pm IST