Ordinance To Check MFIs May Come In

The State government will mostly likely promulgate an ordinance shortly to check MFIs.

Speaking to media persons on Wednesday, Rural Development Minister Vatti Vasanth Kumar said that the Cabinet will discuss the issue threadbare and arrive at a decision soon on the controversial issue, even as people in villages are reeling under the pressure of MFI agents.

Since the subject of MFIs comes under the purview of the RBI, legal consultations are going on at the moment.

The government is also scheduled to discuss the issue with a State-level bankers' committee shortly.

"The government cannot shut its eyes. We will act," Vasanth Kumar assured.

Chief Minister K Rosiah had also spoken to Prime Minister Manmohan Singh about the need to check MFIs, during his trip to New Delhi, the minister informed.

Further, the Chief Minister will also hold a video conference on Thursday with the district Collectors on the subject, he said.

Asked about the urgency to act on the issue, he said, "This is a burning issue and the government is firm on action."

Several suicides due to the inability of the debtors to pay the exorbitant interest charged by the MFIs, have come to the notice of the government, he revealed.

So far 25 persons have resorted to suicides, he said. The abnormal interest component, at the rate of Rs. 6, accrues to about 72%, the minister stated.

Earlier, the minister held a video conference here with various representatives of self-help groups and others across the State, and elicited their opinions and heard their grievances.

If the PDs release adequate funds properly for self help group women members, they would not have approached micro finance institutions seeking loans with high rate of interest, the Minister stated.

When women from certain SHGs complained to him that they were not receiving funds properly, Vasanth Kumar expressed his anger over the Project Directors of the Integrated Tribal Development Agency for their failure in meeting targets set for the release of funds sanctioned for the purpose.

The SHGs stated that interest of Rs. 6 was charged on loans, and provisions of insurance were being imposed on them.

He assured them of government support, and said that they must not succumb to "pressure tactics" employed by the MFIs.

Courtesy: INN