<p>Bengaluru: Karnataka's Home Minister <a href="https://www.deccanherald.com/tags/g-parameshwara">G Parameshwara </a>said on Tuesday that the state government had proposed a maximum jail term of 10 years for erring <a href="https://www.deccanherald.com/tags/microfinance-institutions">microfinance companies</a>. </p><p>In an earlier draft, which the Cabinet discussed on January 30, the maximum punishment had been three years. The final draft of the <a href="https://www.deccanherald.com/tags/ordinance">ordinance</a>, chalked out by a team of bureaucrats working at the chief minister’s behest, has gone for the Governor’s assent. </p>.Man dies by suicide after 'harassment' by microfinance companies in Karnataka.<p>Speaking to reporters, Parameshwara said: “We have also mandated a fine of Rs 5 lakh. If the law isn’t strong, these incidents will not stop. This is intended to act as a deterrent.”</p><p>When asked what steps the government would take to hold its own when microfinancers approach the court, the home minister argued that there had been some delay for this very reason.</p>.Karnataka govt plans online system for microfinance loans.<p>“When we prepared the first draft, we discussed that MFIs may approach the court. The chief minister had directed the Law Department to take precautions, leading to a few days' delay. The new draft has considered all these views. We hope it won’t be a problem for the government.”</p>.Call me if microfinance agents harass you: Kumaraswamy.<p>DH has learnt that other provisions in the initial draft, such as registration of MFIs within 30 days of the Act being implemented, the registering authority’s right to cancel the license of an MFI, maintaining transparency in interest rates, appointing an ombudsman to act as a mediator, permitting the police to register sou motu cases against MFIs and money lenders and so on have been retained in the final draft. </p><p><strong>Helplines to register complaints</strong> </p><p>Meanwhile, Chief Secretary Shalini Rajneesh advised borrowers to complain about unregistered money lenders through helpline numbers.</p><p>The other guidelines laid down by the chief secretary for the MFIs to follow include informing the borrower about the loan rules in the vernacular language or a language that the borrower understands, providing adequate information about the documents the borrower must provide, providing a signed receipt in response to the borrower returning the loan and so on.</p><p><strong>Reserve Bank helpline:</strong> 14448</p><p><strong>State’s integrated helpline:</strong> 112 or 1902</p>
<p>Bengaluru: Karnataka's Home Minister <a href="https://www.deccanherald.com/tags/g-parameshwara">G Parameshwara </a>said on Tuesday that the state government had proposed a maximum jail term of 10 years for erring <a href="https://www.deccanherald.com/tags/microfinance-institutions">microfinance companies</a>. </p><p>In an earlier draft, which the Cabinet discussed on January 30, the maximum punishment had been three years. The final draft of the <a href="https://www.deccanherald.com/tags/ordinance">ordinance</a>, chalked out by a team of bureaucrats working at the chief minister’s behest, has gone for the Governor’s assent. </p>.Man dies by suicide after 'harassment' by microfinance companies in Karnataka.<p>Speaking to reporters, Parameshwara said: “We have also mandated a fine of Rs 5 lakh. If the law isn’t strong, these incidents will not stop. This is intended to act as a deterrent.”</p><p>When asked what steps the government would take to hold its own when microfinancers approach the court, the home minister argued that there had been some delay for this very reason.</p>.Karnataka govt plans online system for microfinance loans.<p>“When we prepared the first draft, we discussed that MFIs may approach the court. The chief minister had directed the Law Department to take precautions, leading to a few days' delay. The new draft has considered all these views. We hope it won’t be a problem for the government.”</p>.Call me if microfinance agents harass you: Kumaraswamy.<p>DH has learnt that other provisions in the initial draft, such as registration of MFIs within 30 days of the Act being implemented, the registering authority’s right to cancel the license of an MFI, maintaining transparency in interest rates, appointing an ombudsman to act as a mediator, permitting the police to register sou motu cases against MFIs and money lenders and so on have been retained in the final draft. </p><p><strong>Helplines to register complaints</strong> </p><p>Meanwhile, Chief Secretary Shalini Rajneesh advised borrowers to complain about unregistered money lenders through helpline numbers.</p><p>The other guidelines laid down by the chief secretary for the MFIs to follow include informing the borrower about the loan rules in the vernacular language or a language that the borrower understands, providing adequate information about the documents the borrower must provide, providing a signed receipt in response to the borrower returning the loan and so on.</p><p><strong>Reserve Bank helpline:</strong> 14448</p><p><strong>State’s integrated helpline:</strong> 112 or 1902</p>