Daijiworld Media Network – Udupi (JD)
Udupi, Jan 30: “Both borrowers and lenders must follow the guidelines prescribed by the Reserve Bank of India while processing loans through microfinance institutions,” stated Dr Vidya Kumari, deputy commissioner of Udupi district.
She was addressing the media during a briefing at the DC’s office. “On the instructions of the state government, we convened a meeting with various microfinance institutions. These institutions must operate strictly under RBI’s prescribed guidelines. They can offer loans to individuals with an annual income of less than Rs 3 lac, and the loan amount should not exceed 50% of their annual income. A thorough process must be followed when providing the loan. The financial institution should ensure that a detailed fact sheet, outlining the loan repayment and interest rate schedule, is shown and explained to the borrower in their local language. Repayments or recoveries can only be collected between 9 am and 6 pm, and under no circumstances can the borrower be harassed,” she emphasised.
Regarding the responsibilities of borrowers, Dr Kumari added, “Borrowers must also be cautious and mindful. They should only avail loans based on their repayment capacity and should make regular payments. Currently, we have not received any complaints about microfinance institutions. A control room has been set up with the number 0820-2574802, operating between 9 am and 6 pm. Stringent action will be taken if any complaints are received.”
As per earlier data, there were around 120 microfinance institutions in the district, of which only 25 attended the meeting. The rest have either stopped their operations or closed down.
Superintendent of Police Dr Arun K stated, “Police can file an FIR directly if any institution is operating without registration. Microfinance loans are collateral-free and must comply with RBI guidelines. In 2024, we filed two FIRs related to microfinance issues and received 17 petitions. If there are complaints, the public can directly file them. It is the responsibility of both the borrower and the lender to follow the guidelines.”
The meeting was attended by assistant commissioner Maheshchandra, lead bank manager Harish, district-level officers, Tahsildars, and representatives of various microfinance institutions.