DC orders cancellation of errant moneylenders' licences

DC orders cancellation of errant moneylenders' licences

Deputy Commissioner A B Ibrahim has directed the Deputy Registrar of Cooperative Societies B K Saleem to terminate the licence of moneylenders who do not have a proper permanent address and those who fail to submit the account statements of the financial year 2014-15.

Chairing a meeting of a committee constituted to monitor the implementation of the Karnataka Pawnbrokers Act 1961, the Chitfund Act 1982, and the Karnataka Prohibition of Charging Exorbitant Interest Act 2004 here on Monday, he said the harassment by moneylenders for recovery of loans or collecting exorbitant interest rates of more than 16 per cent should be brought to the notice of the nearest Department of Agriculture, Horticulture office or the police.

This kind of interest rate is called ‘meter baddi’ in local parlance.

Deputy Registrar of Cooperative Societies Saleem has warned moneylenders and financial institutions of the district not to charge higher rates of interest.

He said “private moneylenders and other financial institutions should charge only 14 per cent and 16 per cent interest for any secured loan and unsecured loan, respectively. The borrower should collect the receipt for the interest paid. This will help the cooperative societies to crack down on moneylenders charging exorbitant interest. Many a time, the log book and the receipt show interest charged within the permissible limits. In reality, they would have charged more than 20 per cent interest. Hence, the borrower should be cautious and collect the receipt for the interest they have paid,” he added.

The Lead Bank Manager said all the recovery of crop loan process has been stopped in the district. The loans have been rescheduled.  

The Deputy Registrar of Cooperative Societies said there are 120 Non-banking financial companies in the district. They are registered under Reserve Bank of India and Cooperative Societies have no control over them. He said the officials from cooperative department had verified the documents of over 30 moneylenders in the district. There were irregularities like not mentioning the interest rate charged in the book in 10 to 12 cases. A non registered moneylender in Puttur has been brought to the notice of the police and FIR was registered against him.

SP S D Sharanappa said cases have been registered against 25 non registered moneylenders in the district. The district administration in association with the police department have started creating awareness among farmers about the futility of taking extreme steps like suicide through pamphlets. If the public inform the police on exorbitant interest collected by the private moneylenders, then action will be initiated against them.
The DC also directed the tahsildars and Assistant Commissioners to convene a meeting of bankers, cooperative societies at the taluks.