Rise in suicide cases: Govt mulls regulating MFIs

Taking a serious note on the suicides due to the purported harassment or embarrassment caused by the collection agents of the Micro Finance Institutions (MFIs), Minister for Rural Development, IKP, Pensions, NREGP and Self-Help Groups, Vatti Vasanth Kumar on Tuesday stated that the government was contemplating to make an Act to streamline the operations of the MFIs in the state.

Talking to media persons in the National Capital, 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.

Mr Vasanth Kumar said the government would soon make an ordinance to the existing act after discussing with officials concerned to check alleged activities of firms.

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.

Mr Vasanth Kumar directed the police to book criminal cases against such 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 the members.

If the police did not initiate action on the complaints, the government would take disciplinary action against police officials, Mr Satyanarayana warned.

He said the government was drafting rules and regulations to regulate the operations of MFIs.

Mr Satyanarayana said the government would also conduct a study on the reasons behind members of the Self Help Groups approaching MFIs. The study would reveal whether the financial assistance sanctioned for them was not reaching properly.

Taking serious note on suicides, Director General of Police K Aravinda Rao in Vijayawada stated if the police receive any complaints, they would act serious against such firms.

He directed the officials to maintain vigil on such finance firms, which resort to violence in collection of loans, during a review meeting with his officials.