Deputy Commissioner K. Vidyakumari chaired a meeting on regulating microfinance institutions operating in Udupi district on Thursday, January 30, at Rajatadri, district office complex, in Manipal.
| Photo Credit: SPECIAL ARRANGEMENT
Udupi Deputy Commissioner K. Vidyakumari on Thursday, January 30, said microfinance institutions can lend only up to ₹3 lakh loan to a customer as per the Reserve Bank of India (RBI) guidelines.
The Deputy Commissioner further said institutions should follow the laid down law on loan recovery and were barred from resorting coercive method. In such an event, police were empowered to register suo moto cases.
Chairing a meeting on regulating microfinance institutions at the district office complex in Rajatadri, Manipal, Ms. Vidyakumari said microfinance corporations operating in the district should compulsorily follow the guidelines issued by the Reserve Bank of India. She said the recent reports on harassment of microfinance customers prima-facie indicate failure to adhere to RBI guidelines.
The Deputy Commissioner said microfinance institutions should conduct proper background verification of customers seeking loan, including their total family income. They should lend only 50% of the total family income as loan to a customer. However, it appeared the institutions did not follow guidelines on the repayment capacity of the customer and randomly provided loans. Even customers should follow financial discipline, she suggested.
Ms. Vidyakumari also said when customers become abusive against lending institutions or institutions use force against customers, both could complain to her office control room on Ph: 0820-2574802.
Superintendent of Police K. Arun said microfinance institutions should conduct the business in a decent manner and their personnel should not visit customers’ premises before 9 a.m. or 6 p.m. for loan recovery. If they violate the guidelines and indulge in harassment, necessary action would be initiated against them, he warned.
Assistant Commissioner Maheshchandra, Lead Bank Manager Harish and other officials were present.
Published – January 30, 2025 09:05 pm IST