Karnataka to Strengthen Laws Against Microfinance Harassment

The Karnataka government is set to review and reinforce legislation aimed at preventing harassment by microfinance institutions. A task force of senior officials is established to expedite the drafting of a robust law. Enhanced powers for police and the appointment of an ombudsman are part of the proposed measures.

The Karnataka government has resolved to review provisions of an ordinance intended to prevent harassment by microfinance institutions, signaling a move towards stronger legislative action. This development was disclosed in an official statement from Chief Minister Siddaramaiah's office on Thursday.

An official task force, comprising senior members from the Law and Finance Departments, has been formed to accelerate the drafting of this robust law aimed at addressing the plight of borrowers. The meeting to orchestrate this initiative was chaired by Siddaramaiah and witnessed the presence of senior ministers and officials.

This meeting was convened in response to growing complaints regarding borrower harassment by microfinance companies. There have been tragic reports of suicides and homeowners in distress due to forced auctions by lenders. Proposed measures include granting police enhanced powers and appointing an ombudsman to enforce the law against exploitative recovery practices.

(With inputs from agencies.)