State Govt Warns Microfinance Firms Over Harassment For Loan Recovery

Any loan recovery process should be legal and humane SIDDARAMAIAH, Chief minister

- HT Correspondent

BENGALURU: Karnataka chief minister Siddaramaiah has issued a warning against the use of rowdy elements or coercive tactics by microfinance institutions (MFIs) for loan recovery.

Speaking at a press conference following a high-level meeting at his residence, he made it clear that any company found violating these directives will face strict legal action, including criminal charges.

The warning comes after a string of distressing incidents across the state, where borrowers, allegedly burdened by loans from MFIs, have been reportedly driven to extreme measures, including suicide. The issue has prompted an urgent reassessment of how these lenders operate, particularly in rural districts.

"We will not tolerate the harassment of poor borrowers," Siddaramaiah said, addressing the media after the meeting with deputy chief minister DK Shivakumar, home minister G Parameshwara, and senior government and law enforcement officials. "Any loan recovery process should be legal and humane. The government is prepared to take all necessary steps to ensure that borrowers are protected from exploitation."