Guwahati: In a unanimous move to protect the economically vulnerable women of Assam, the Assam assembly on Wednesday passed the Micro Finance Institutions (Regulation of Money Lending) Bill 2020. The bill is aimed towards protecting economically weak women, individuals and groups who fall prey to dubious microfinance institutions (MFIs) and money lenders.
The unanimously passed bill proposes "to create an effective mechanism to regulate the micro finance institutions or money lending agencies or organisations". Notably, the bill comes in accordance with the Reserve Bank of India (RBI) guidelines and suggested amendments for money-lending by agencies and MFIs. Earlier the Bill was proposed and approved by the Assam cabinet on December 13 so as to bring up a new act for the micro finance institutions of the state.
Stating that the passing of this bill comes in the best interests of the women of Assam, State Finance Minister Himanata Biswa Sarma described it as the best legislation given by the government to the state's women, who have long been exploited and taken advantage of by loan recovery agents. While speaking of the proceedings, Sarma highly objected to the RBI's involvement in the matter demanding prior consultations before passing of this bill. He questioned their letter of amendments and stated that the bill was entirely a privilege of the House.
Reportedly, MFIs have been operating illegally all across Assam and lending money to economically vulnerable people at large rates of interest or without assessing their loan repayment capacity. A lot of these agencies have especially targeted women and manipulated them for sexual favours in return for borrowing money.
Regarding the bill, Parliamentary Affairs Minister Chandra Mohan Patowary said, "The proposal to bring in a new Act to control the micro finance units was passed. They have to operate as per Reserve Bank of India"s norms and should not be able to levy any rate on consumers, who are mostly women SHGs from villages."
Reportedly, different MFIs have lent around Rs. 12000 crores to people all across Assam, mostly unsuspecting women. When it comes to the RBI guidelines, a woman is entitled to taking only two loans from MFIs at a time, but in Assam, there have been instances of providing up to five loans to a woman, explained Minister Sarma.
The passing of this bill enforces a law prohibiting all agencies and micro finance institutions to lend money without proper registration. The implementation further stops harassment of women in the hands of these shady institutions. Moreover, none of the micro finance institution will be able to lend money to any individual whose cumulative outstanding is not more than Rs 1.25 lakh.
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