Ordinance to curb MFI 'harassment' likely before Karnataka Cabinet on Friday

Bengaluru: Karnataka government on Wednesday finalised an ordinance to protect borrowers facing harassment from microfinance institutions (MFIs). 

The ordinance was finalised at a meeting held by Home Minister Dr G Parameshwara, and Minister for Law and Parliamentary Affairs H K Patil, which officials also attended. The ordinance is expected to receive the state cabinet nod on Thursday. 

Parameshwara, interacting with journalists after the meeting, said that the government had taken cognisance of reports of debtors being harassed by microfinance companies. "The Chief Minister wanted an ordinance brought in to curb this menace. We have held elaborate discussions in this regard," he said. 

Noting that it was the underprivileged who took loans from microfinance companies, the Home Minister said that the government was not waiting for the Budget Session to pass a bill on the issue, and bringing the ordinance without delay. 

“Neither are we scuttling the financial transactions of the microfinance companies nor restricting the quantum of loans they can give. However, the way they are collecting the loans is not right. We will create awareness among the people about the way to take and give loans,” said Parameshwara.