Taking 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.