Law to curb Microfinance harassment to come into effect soon: Karnataka CM Siddaramaiah

The state government has planned an ordinance to prevent microfinance companies from exploiting the poor to recover loans.

Karnataka Chief Minister Siddaramaiah announced on Wednesday that the state government will soon enforce an ordinance to curb harassment by microfinance companies. He added that the ordinance has received the Governor's approval.

Karnataka Chief Minister Siddaramaiah (PTI)

In his X post, CM wrote, "An ordinance designed to prevent harassment of borrowers by microfinance companies under the pretext of debt collection has received the Governor's signature. This law will come into effect soon and protect people against illegal loan collection and harassment by microfinance institutions. Don't let anyone make any hasty decision out of fear of harassment from microfinance. Our government is with you."

The state government has planned an ordinance to prevent microfinance companies from exploiting the poor to recover loans.

The chief minister's office said on Wednesday that Karnataka Governor Thawar Chand Gehlot signed the ordinance regarding the microfinance rules that the Karnataka government recently decided on at a Cabinet meeting.

Earlier on February 3, Deputy Chief Minister DK Shivkumar 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."

When asked about the continuing torture despite government warnings, he said, "Many FIRs have been filed against microfinance companies in Belagavi, Bidar, Mysuru, and Ramanagara. The CM and the cooperative ministers have already issued stern warnings."

Shivakumar added, "An ordinance is ready and will be sent to the Governor in a couple of days. We have also started helplines in every district headquarters. The CM will also hold meetings on this with senior police officials."

The microfinance companies in Karnataka allegedly abused several families in Karnataka. Those families had complained that microfinance company representatives were harassing them in the name of repayment.

(With ANI inputs)