a serious note on the suicides due to the purported harassment or
embarrassment caused by the collection agents of Micro Finance
Institutions (MFIs), Minister for Rural Development, IKP, Pensions,
NREGP and Self-Help Groups, Vatti Vasanth Kumar stated that the
government was contemplating making an Act to streamline the operations
of MFIs in AP.
Talking to media
persons in the New Delhi, the minister said that the government would
frame rules and regulations to streamline operations of MFIs, as reports
of a large number of women and rural folks committing suicides were on
the rise. These people were resorting to taking the extreme step, unable
to pay their loans because of the exorbitant interest rates being
charged by the firms, according to the reports.
Vasanth Kumar said the government would soon make an ordinance to the existing Act after discussing the matter with officials.
The minister said the
government has no power to reduce interest rates being charged by MFIs.
He said only the Reserve Bank of India can take a decision on cutting
the interest rates.
Vasanth Kumar directed the police to book criminal cases against firms which resort to violent methods to recover their loans.
Meanwhile, Panchayati
Raj Minister Botsa Satyanarayana directed the officials to initiate
stringent action against those MFIs which resort to violence in
collecting their loans.
He told media persons
in Vizianagaram that the government has directed the police to register
cases against agents of finance firms who harass members.
If the police does
not initiate action on the complaints, the government would take
disciplinary action against police officials, Satyanarayana warned.
He said the government was drafting rules and regulations to regulate the operations of MFIs.
Botsa said the
government would also conduct a study on the reasons behind members of
Self Help Groups approaching MFIs. The study would reveal whether the
financial assistance sanctioned for them was not reaching properly.
Taking a note of the
suicides, Director General of Police K Aravinda Rao in Vijayawada stated
if the police receive any complaints, they would act seriously against
such institutions.