From Our Special Correspondent
Daijiworld Media Network

Bengaluru, Jul 21: Gold loan companies, which lent loans to farmers against gold ornaments and were resorting to coercive measures for recovery of the amount, would be issued notices by the State Government against such practices, Karnataka Chief Minister Siddaramaiah announced in the State Legislative Assembly on Tuesday.

He was replying to the debate on the no-confidence motion against the two-year-old Siddaramaiah regime by JD(S) leader and former chief minister H D Kumaraswamy.

The chief minister assured that the State Government would take all measures to instil confidence in the farming community in the wake of the spate of suicides by farmers during the last few weeks.

Siddaramaiah said companies, which lend loans on gold mortgage too, would face the heat if they are found charging exorbitant interest rates,

The Chief Minster said the State Government had taken note of complaints against Manappuram, Muthoot and other finance companies, which lend loans on gold mortgage.

“Any company or financial institution that charge over 14% interest rate for secured loans and more than 16% interest for unsecured loans would face action," he declared.

State Cooperation Minister H S Mahadevaprasad came out more details on the action taken against erring finance companies and said action had been initiated against these companies.

But the three companies have moved the court and got a stay order issued, he said.

“We are trying to get the stay order vacated. Further action would be initiated once the stay order is lifted," the minister said.

The Chief Minister also explained the measures initiated by the State Govermment to instil a sense of confidence among the farmers in distress.

He said directions had been issued to all cooperative banks not to issue recovery notices for farm loans.

The State-level Bankers Meeting would be convened in a day or two to ask the nationalised banks not to issue recovery notices, he said.

Criminal cases were being booked against private money lenders who were charging high interest rates, he said disclosing that 800 cases have been booked and 441 have been arrested so far.

“We are doing our best to protect the interests of the farmers and take steps to reassure them that the State Government would stand by them,’’ he added.