Law needs teeth to fight 'meter baddi' menace, admits Karnataka govt

In Karnataka, the 'meter baddi' system—an exploitative practice of lending at extremely high rates of interest—has earned notoriety over the years. It has been linked to farmer suicides as well.

Belagavi: Home Minister G Parameshwara assured the Karnataka Assembly on Tuesday that the government would strengthen the existing law to fight the menace of 'meter baddi' (meter interest), an exploitative practice of lending at extremely high rates of interest.

The issue was raised in a calling-attention motion by Sira Congress MLA TB Jayachandra.

"Go to any village. Suicides are happening unabated. It's almost always due to financial troubles and the meter baddi business," Jayachandra said.

Jayachandra urged the government to tweak the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004. "Amend the Act and make it a cognisable offence so that the accused can be arrested immediately," he said.

In Karnataka, the 'meter baddi' system has earned notoriety over the years. It has been linked to farmer suicides as well.

Under the 'meter baddi' system, if one borrows Rs 1,000 from a moneylender, the person has to pay an interest of Rs 100 every month. Upon defaulting on repayment, the person has to pay a 10% interest on Rs 1,110 from the next month. Another default means 10% on Rs 1,200.

'Meter baddi' is charged on a daily basis, too, as explained by Parameshwara himself.

"I was Bengaluru City Development minister (under HD Kumaraswamy's government). At the City Market, all the flower sellers outside borrow under meter baddi. If Rs 100 is borrowed, the lender gives them Rs 90. But Rs 100 must be returned by evening. It's a big business," Parameshwara said.

Parameshwara also said that the recent case of a family of five dying by suicide in Tumakuru was due to pressure from moneylenders. "Garib Sab had come to Tumakuru from Sira for a livelihood. He had taken hand loans. His neighbour had provided surety for his loans. The neighbour was pressurising him to repay the loans. One night, Garib Sab strangled his three children. He and his wife later hanged themselves," he said.

"Investigation found that the meter baddi business is happening rampantly everywhere," Parameshwara said.

According to data laid in the Assembly by Parameshwara, the government has registered only 97 cases in the last three years - 30 in 2021, 37 in 2022 and 30 in 2023. "This is not at all enough," the minister admitted.

Parameshwara said the Karnataka Prohibition of Charging Exorbitant Interest Act needs strengthening. "We will discuss this and try to end this menace," he said.