The State Cabinet, on Thursday, unanimously agreed on the proposal to bring in an Ordinance to check the functioning of Micro Finance Institutions.
Talking to media persons at the Secretariat, Minister for Rural Development Vatti Vasantha Kumar, accompanied by I&PR Minister Geetha Reddy, stated that the government will now send the draft Ordinance (Micro Finance and Money Lenders' Regulatory Act 2010) to the State Governor E S L Narasimhan for his assent.
Asked to divulge the details of the ordinance, the Minister said that he is not be in a position to talk about it right now.
Vasanth Kumar, however, informed that the existing loans availed by SHG members from MFIs will be swapped. Debt swapping is the conversion of loans to subsidize interest rates from the existing interest rate.
The Cabinet also discussed the need to identify the victims of MFIs. Revenue Division Officials will be directed to monitor the situation closely and find out whether excess interest was charged and collected.
The Revenue authorities were also directed to check whether the MFI units are registered. In case the institutions are defaulters, a fine of Rs. 3 lakhs or a 3 year jail term will be imposed.
The Minister said that in the State Assembly meeting held in July, a Money Lenders Act was raised, and that the proposal was sent to New Delhi for approval as the interest charged by the RBI was a Central subject.
THe Parliament's nod and then the President's assent was awaited, Vasantha Kumar informed.
The Cabinet is also understood to have discussed the pending issue of government staff, and the State government's plea for the Centre's cooperation for enhancing godown capacity, among others.
Courtesy: INN
filed in:Microfinance, Microfinance Institutions, Vatti Vasantha Kumar, Rural Issues, Self Help Groups