Karnataka to Crack Down on Predatory Microfinance Practices

The Karnataka government plans to introduce stricter laws to regulate microfinance companies following reports of coercive loan recovery practices. A meeting led by Chief Minister Siddaramaiah aims to address these issues. Opposition leader H D Kumaraswamy criticized the government's response, advocating for decisive action against exploitative institutions.

The Karnataka government is poised to enact stricter regulations on microfinance firms as part of efforts to curb harassment by loan recovery agents, Home Minister G Parameshwara announced on Friday.

Revelations from across the state detail extreme measures taken by agents, leading to suicides, prompting Chief Minister Siddaramaiah to call for an urgent meeting on the matter. There are concerns over deficiencies in current legislation regarding the protection of borrowers.

Parameshwara criticized microfinance companies for coercing borrowers into signing unexplained documents, while former CM H D Kumaraswamy lambasted the government's previous inaction against these entities. He urged swift, strong measures to shield citizens from exploitative practices.

(With inputs from agencies.)