The Money Lending Regulation Bill has been passed to regulate the microfinance institutions in Assam. It states that recovery agents engaged by microfinance institutions could face arrest if they are, in any way, found harassing a loanee. The Bill also gives the District Commissioner the liberty to initiate a suo motu inquiry in the cases of such practice.
Assam State Finance Minister Himanta Biswa Sarma has said that the idea behind this bill is to regulate such micro-finance institutions and to hold them accountable in the case of any unethical practice. The bill in consideration will also require all micro-financial institutions to get themselves registered within 30 days of it becoming law.
Announcing a corpus budget of Rs. 500 crores for the economic rehabilitation of those unable to pay the loans, Sarma added, “At the moment, nobody knows how many such institutions exist in the state. We have been told that loans worth around Rs 12,000 crores have already been given by such institutions without adhering to any laid down norms. Once the Act comes into being, all the financial institutions would have to renew their registration after every two years. The proposed law will do away with the concept of agents.”
The minister also mentioned how women loanees mostly fall into the trap of these institutions. In addition to that, such institutions will be required to grant a moratorium on interest in the event of any flood or other kinds of the natural calamity for the period of at least three months under the above-mentioned bill.
