The minister asks officials to present cases against microfinance companies that mock RBI’s standards in Karnataka

The reports of microfinance companies that use doubtful methods to recover loans from poor borrowers have appeared in Karnataka. In response, the Minister of Income, Krishna Byre Gowda, instructed the attached commissioners of the district to present criminal cases against such companies if they violate the RBI standards.

This directive was issued during a meeting of attached commissioners in Bengaluru, according to the Hindu.

Byre Gowda also ordered the attached commissioners and police superintendents to meet with representatives of the microfinance company within a week. Officials will warn them about legal actions if they do not comply with RBI loan recovery guidelines, according to the report.

“In the absence of central action, the State must intervene to protect poor families. We will use other legal provisions to act against wandering companies, ”said the minister in the report.

He also blamed the “irresponsible loans” practices for microfinance companies For the increase in default values. Companies often do not evaluate the reimbursement capacity of the borrowers, he said.

Byre Gowda said the RBI guidelines limit individual microfinance loans to ₹ 2 Lakh, but many companies are not adhering to this limit. This practice, he said, harms borrowers and could interrupt the operations of companies over time.

More than 20 Lakh sites in residential designs not authorized in the urban areas of Karnataka lack adequate property documentation under the E-AASTHI system.

These properties, although they benefit from infrastructure, evade property taxes.

To address this, the Government will provide an unique B-Kata electronic solution for three months from February 10.

The rules for this initiative will end soon, Byre Gowda announced.

The attached commissioners will lead a campaign to broadcast b-katas for these properties. However, the Government will not allow B-Khatas in the future to require all designs to obtain the necessary authorizations.

The minister cited an order of the Supreme Court of December 17 that condemned unauthorized designs and constructions.

A similar campaign will be launched to broadcast b-katas for properties in authorized designs of the village, he added.