Karnataka: DCs instructed to file criminal cases against microfinance firms if they adopt dubious methods to recover loans
1 month, 3 weeks ago

Karnataka: DCs instructed to file criminal cases against microfinance firms if they adopt dubious methods to recover loans

The Hindu  

With reports from across districts of microfinance company representatives adopting dubious means to recover loans from poor defaulters, Revenue Minister Krishna Byre Gowda instructed Deputy Commissioners of districts to file criminal cases against companies if they violate RBI norms in the process of loan recovery. At a meeting of the Deputy Commissioners held in Bengaluru, Mr. Byre Gowda directed Deputy Commissioners and Superintendents of Police of districts to hold meetings with representatives of microfinance companies within a week to warn them that cases would be filed if they violate RBI norms while recovering loans. No power to States Mr. Byre Gowda said that RBI and the Centre had not given any powers to the State to check such violation by microfinance firms. We will use various other provisions to book erring micro finance firms.” Mr. Byre Gowda also observed that “irresponsible lending” by firms without verifying the repaying capacity of people was also one of the reasons for increase in number of defaulters.

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History of this topic

How Karnataka’s new Ordinance proposes to crack down on microfinance institutions
1 month ago

How Karnataka’s new Ordinance proposes to crack down on microfinance institutions

The Hindu  

The story so far On February 12, 2025, after days of deliberations, the State government promulgated the Karnataka Micro Loan and Small Loan Ordinance, 2025, which aims to crack down on unregistered and unlicensed microfinance institutions and moneylending agencies or organisations that employ forceful means to recover loans given to poor people. The new legislation seeks to regulate the actions …

4 microfinance firms booked after man dies due to ‘relentless pressure’ by agents: Police
1 month ago

4 microfinance firms booked after man dies due to ‘relentless pressure’ by agents: Police

Hindustan Times  

A case of abetment to suicide has been registered against four private microfinance companies after a man in Belagavi district died during treatment days after he attempted suicide allegedly due to “relentless pressure” from microfinance loan recovery agents, police said on Monday. Belagavi superintendent of police Bhimashankar Guled said the police have notified all registered microfinance and private finance companies …

25 cases booked as crackdown on private finance companies begins in Dharwad
1 month ago

25 cases booked as crackdown on private finance companies begins in Dharwad

The Hindu  

The Dharwad district administration has begun a crackdown on private finance companies and microfinance companies involved in harassment of farmers and rural poor over loan repayment. Police officers have registered over 25 cases against microfinance companies on the charge of harassment, officers said. The district administration has also introduced a helpline through which victims can file complaints against mental and …

Siddaramaiah instructs DCs, SPs to take steps to close all illegal MFIs
1 month ago

Siddaramaiah instructs DCs, SPs to take steps to close all illegal MFIs

The Hindu  

Karnataka Chief Minister Siddaramaiah on Saturday instructed Deputy Commissioners and Superintendents of Police of all districts to take steps to shut down all illegal and unregistered microfinance institutions that are exploiting the poor by charging exorbitant rates of interest on loans. The Chief Minister held a videoconference with DCs and SPs and sternly told them to take steps to implement …

Karnataka MFI ordinance isn’t that bad. But the industry is still worried
1 month, 1 week ago

Karnataka MFI ordinance isn’t that bad. But the industry is still worried

Live Mint  

Mumbai: The new ordinance notified by the Karnataka government to regulate microfinance loan recoveries may have come as a relief to non-bank microfinance companies regulated by the Reserve Bank of India, but experts warn that collections could get impacted in the next two quarters. While the preamble of the ordinance clarifies that regulated MFI lenders will be excluded, the entire …

Karnataka Governor Rejects Microfinance Ordinance, Cites Injustice To Lenders
1 month, 2 weeks ago

Karnataka Governor Rejects Microfinance Ordinance, Cites Injustice To Lenders

ABP News  

Governor Thaawarchand Gehlot on Friday rejected Karnataka Micro Finance Ordinance 2025, stating that in its current form, the lenders, who are also part of the society, are being done a great injustice. Aimed at protecting borrowers from harassment by microfinance institutions, the Karnataka government drafted the ordinance with penal provisions, including a jail term up to 10 years, and fine …

Karnataka ministers respond to Governor's remark on microfinance ordinance
1 month, 2 weeks ago

Karnataka ministers respond to Governor's remark on microfinance ordinance

India Today  

Karnataka Home Minister G Parameshwara announced that the state government would address the Governor Thaawarchand Gehlot’s concerns and resubmit the Karnataka Micro Finance Ordinance 2025 for assent. The ordinance, aimed at protecting borrowers from harassment by microfinance institutions, was returned by the Governor, who cited regulatory excesses and disproportionate punishments such as a 10-year imprisonment and a Rs 5 lakh …

Karnataka: Governor returns microfinance Ordinance, says existing laws can be used to curb harassment
1 month, 2 weeks ago

Karnataka: Governor returns microfinance Ordinance, says existing laws can be used to curb harassment

The Hindu  

Flagging problem areas in the Karnataka Micro Loan and Small Loan Ordinance, 2025, Governor Thaawarchand Gehlot on Friday returned it to the State government suggesting that the Ordinance will benefit only borrowers and no provisions have been made to provide protection to lenders. Moreover, the Governor suggested to the government to enforce the existing laws effectively to prevent harassment of …

Governor returns Karnataka microfinance ordinance
1 month, 2 weeks ago

Governor returns Karnataka microfinance ordinance

The Hindu  

Governor Thaawarchand Gehlot returned to the State Government the Karnataka Micro Loan and Small Loan Ordinance, 2025, suggesting that the ordinance will benefit borrowers while no provision has been made to provide protection to lenders. The Governor advised the State Government to deliberate on the issue in detail and bring an effective enactment in the interest of the affected people …

Maximum punishment for defaulting MFIs increased to 10 years, says Home Minister
1 month, 2 weeks ago

Maximum punishment for defaulting MFIs increased to 10 years, says Home Minister

The Hindu  

Home Minister G. Parameshwara on Tuesday said that the maximum imprisonment for erring microfinance institutions had been increased from three to 10 years in the final draft of the Ordinance. Speaking to reporters, Dr. Parameshwara said, “The government has increased the prison term from three to 10 years and mandated a fine amount of ₹10 lakh. Relief proposed The draft …

Karnataka Deputy CM says police will be given more power in Ordinance to rein in microfinance companies
1 month, 2 weeks ago

Karnataka Deputy CM says police will be given more power in Ordinance to rein in microfinance companies

The Hindu  

Deputy Chief Minister D.K. Shivakumar on Monday said that the State government will give more powers to the police to curb the torture of the poor by microfinance companies in the name of loan recovery. Speaking to reporters on Monday, Mr. Shivakumar said: ”Our government will not allow microfinance companies to take the law into their hands and torture the …

Karnataka cracks down on microfinance firms as rural debt crisis deepens
1 month, 2 weeks ago

Karnataka cracks down on microfinance firms as rural debt crisis deepens

New Indian Express  

The State Government is cracking down on microfinance institutions, using strongarm tactics to recover loans, and drafting a law to check their excesses. The current crisis, to some extent, reflects a larger problem -- the distress in the rural economy -- and this calls for a holistic approach, including the law that is in the works. The system’s failure According …

Karnataka: Online portal to track loan details to tackle harassment by microfinance institutions proposed
1 month, 2 weeks ago

Karnataka: Online portal to track loan details to tackle harassment by microfinance institutions proposed

The Hindu  

A crucial meeting held on Saturday to discuss and draft an Ordinance to curb the excesses of microfinance institutions has proposed to create an online portal to track and update all details on loans. Sources said the meeting proposed that the online portal should track and update details on loan disbursements, ensuring transparency, and preventing over-lending that traps the poor …

Law to curb harassment by microfinance firms soon: CM
Trending News
1 month, 3 weeks ago

Law to curb harassment by microfinance firms soon: CM

Hindustan Times  

The state government will soon introduce a stringent law to curb harassment by microfinance institutions, chief minister Siddaramaiah said on Thursday. The state government will soon introduce a stringent law to curb harassment by microfinance institutions, chief minister Siddaramaiah said on Thursday Chairing a high-level meeting in Krishna, official residence of the chief minister, to address public grievances against microfinance …

Police can book suo moto case if microfinance institutions flout RBI guidelines on loan recovery: DC
1 month, 3 weeks ago

Police can book suo moto case if microfinance institutions flout RBI guidelines on loan recovery: DC

The Hindu  

Udupi Deputy Commissioner K. Vidyakumari on Thursday, January 30, said microfinance institutions can lend only up to ₹3 lakh loan to a customer as per the Reserve Bank of India guidelines. Chairing a meeting on regulating microfinance institutions at the district office complex in Rajatadri, Manipal, Ms. Vidyakumari said microfinance corporations operating in the district should compulsorily follow the guidelines …

Chikkamagaluru DC holds meeting with representatives of microfinance institutions
1 month, 3 weeks ago

Chikkamagaluru DC holds meeting with representatives of microfinance institutions

The Hindu  

The officers of Chikkamagaluru district administration on Wednesday held a meeting with representatives of microfinance institutions and instructed them to follow the directions of the Reserve Bank of India in recovering loans and not to harass the public. Deputy Commissioner Meena Nagaraj and SP Vikram Amathe addressed the representatives in the meeting. The institutions should extend loans as per the …

Bagalkot officials warn private moneylenders against harassment
1 month, 3 weeks ago

Bagalkot officials warn private moneylenders against harassment

Deccan Chronicle  

Bagalkot: The Bagalkot district administration has issued a strict warning to microfinance institutions, financial firms, and private moneylenders against using illegal methods for loan recovery. stated that violations of recovery norms would lead to immediate legal action, even in the absence of a formal complaint. The DC stressed that all financial institutions must adhere to RBI regulations when issuing loans …

Karnataka Government didn’t release money, people had to borrow from microfin firms: LoP Ashoka
1 month, 3 weeks ago

Karnataka Government didn’t release money, people had to borrow from microfin firms: LoP Ashoka

New Indian Express  

BENGALURU: Leader of Opposition in the assembly R Ashoka on Monday alleged that the state government’s failure to disburse loans under various schemes forced people to borrow from microfinance companies. This money could have been given to people as loans, while at the same time, microfinance institutions have stepped in,” he said while addressing the media at Vidhana Soudha. He …

Draft bill to rein in microfinance firms to be discussed at next Cabinet meet
1 month, 3 weeks ago

Draft bill to rein in microfinance firms to be discussed at next Cabinet meet

The Hindu  

Amidst large-scale complaints about harassment by micro finance companies in Karnataka, the State Cabinet will discuss a draft Bill to regulate the activities of microfinance companies at its next meeting on January 30, even as Chief Minister Siddaramaiah said that stern action will be taken on complaints filed by victims of harassment. Patil indicated that draft Bill would be ready …

Helpline in districts to assist victims of harassment by micro finance companies
1 month, 3 weeks ago

Helpline in districts to assist victims of harassment by micro finance companies

The Hindu  

Chief Minister Siddaramaiah on Sunday said that a helpline would be opened in the office of deputy commissioners in the district to help those in distress due to harassment by the micro finance companies, and this helpline would receive complaints from victims. Speaking to media here, he said that action would be initiated against micro finance companies if complaints are …

Karnataka govt. to promulgate ordinance to crack down on MFIs using coercive methods to recover loans
1 month, 3 weeks ago

Karnataka govt. to promulgate ordinance to crack down on MFIs using coercive methods to recover loans

The Hindu  

As microfinance institutions have allegedly been adopting coercive tactics for recovery of loans, which has caused financial distress in several districts of Karnataka, Chief Minister Siddaramaiah on Saturday announced that the government will promulgate an ordinance to crack down on erring financial firms. After public anger against forcible methods of recovery of loans by MFIs, Mr. Siddaramaiah, who also holds …

‘Will amend law to rein in microfinance companies’: Karnataka CM Siddaramaiah
1 month, 3 weeks ago

‘Will amend law to rein in microfinance companies’: Karnataka CM Siddaramaiah

Hindustan Times  

Karnataka Chief Minister Siddaramaiah on Saturday said the state government would amend the existing laws related to money lending business and introduce new legislation to protect the interest of the genuine borrowers. In the wake public outrage against the alleged harassment by micro-finance companies to recover money from borrowers, Siddaramaiah chaired an emergency meeting with his deputy DK Shivakumar, Revenue …

Karnataka to formulate bill to rein in microfinance firms
1 month, 3 weeks ago

Karnataka to formulate bill to rein in microfinance firms

New Indian Express  

BENGALURU: The state government is planning to formulate ‘Karnataka Microfinance Institutions Bill’ to rein in microfinance companies. Disclosing this to reporters here on Friday after a cabinet meeting, Law and Parliamentary Affairs Minister HK Patil said the Reserve Bank of India and other central finance agencies are not able to control microfinance companies. “We are tabling the Karnataka Microfinance Institutions …

CM Siddaramaiah govt on mat as unauthorised microfin firms run free in Karnataka
1 month, 3 weeks ago

CM Siddaramaiah govt on mat as unauthorised microfin firms run free in Karnataka

New Indian Express  

MYSURU: Chikkadevamma cooks for her husband and son, takes a tiffin carrier for herself and reaches a nearby estate for work. She is not alone as villagers are bombarded with offers for loans from representatives from over half-a-dozen microfinance companies that offer loans within an hour. But these easy loan schemes soon turn into deep debt traps as these companies …

Separate law to prevent frauds in financial establishments planned
3 months ago

Separate law to prevent frauds in financial establishments planned

The Hindu  

Revenue Minister Krishna Byre Gowda on Tuesday said the government would be introducing a separate law to prevent fraud in financial establishments, based on recommendations from an expert committee to be set up for the purpose. He was replying to members’ suggestions during the discussion on the Karnataka Protection of Interest of Depositors in Financial Establishments Bill, 2024, in the …

"RBI Officials Involved In Scams Like Kingfisher, Yes Bank", Alleges Subramanian Swamy; Supreme Court Issues Notice On Plea For CBI Probe
2 years, 5 months ago

"RBI Officials Involved In Scams Like Kingfisher, Yes Bank", Alleges Subramanian Swamy; Supreme Court Issues Notice On Plea For CBI Probe

Live Law  

A Division Bench of the Supreme Court of India on Monday issued notice on a writ petition filed by Dr Subramanian Swamy seeking an enquiry by the Central Bureau of Investigation into the role of Reserve Bank of India officials in various banking scams. Gavai and B.V. Nagarathna that the RBI officials had allegedly escaped scrutiny with respect to their …

Punjab National Bank scam: RBI data revealed through RTI shows India's fraud problems extend far beyond PNB
7 years, 1 month ago

Punjab National Bank scam: RBI data revealed through RTI shows India's fraud problems extend far beyond PNB

Firstpost  

Investors may have been shocked when one of India’s biggest banks disclosed a $1.77 billion fraud by billionaire jeweller Nirav Modi, but the central bank has recorded data that shows the problem runs far deeper and wider New Delhi/Mumbai: Investors may have been shocked when one of India’s biggest banks disclosed a $1.77 billion fraud by billionaire jeweller Nirav Modi, …

Banks violated SC guidelines on loan defaults
8 years, 11 months ago

Banks violated SC guidelines on loan defaults

The Hindu  

Despite a nationwide uproar over the gigantic size of non-performing assets and many loan defaults, the public sector banks have violated the Supreme Court guidelines to give prosecution sanction within four months to proceed against officers accused of criminal conspiracy to cheat them. In the case of Indian Overseas Bank, there were seven cases pending, while State Bank of India …

RBI gives loan defaulters' list, urges SC not to reveal names because of 'adverse impact' on business
8 years, 11 months ago

RBI gives loan defaulters' list, urges SC not to reveal names because of 'adverse impact' on business

Firstpost  

The RBI has submitted a list of big loan defaulters in a sealed cover to the Supreme Court with a submission that disclosing their names may have “adverse impact” for business and may “accentuate failure of business”. New Delhi: The RBI has submitted a list of big loan defaulters in a sealed cover to the Supreme Court with a submission …

CBI opens probe into firms defaulting on public sector bank loans
11 years, 7 months ago

CBI opens probe into firms defaulting on public sector bank loans

The Hindu  

Big business houses that secured huge loans from public sector banks post-2008 financial crisis, but defaulted on repayments or charted an escape route through multiple restructuring of bad loans, have now come under the Central Bureau of Investigation’s scanner for suspected wilful misappropriation of public money, running into thousands of crores. “An inquiry has been initiated into the public sector …

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