STAFF
REPORTER
GUWAHATI: To regulate the Micro Finance Institutions (MFIs), the State Assembly passed 'The Assam Micro Finance (Regulation of Money Lending) Bill-2020' on Wednesday. With passage of this Bill, the MFIs will not be able to lend or recover loans in an uncontrolled manner.
The State government will now spell out certain conditions for the MFIs to follow while lending money and recovering them.
State Finance Minister Himanta Biswa Sarma said, "A section of MFIs has created terror on some vulnerable sections of people in the State. The Bill will protect and relieve the economically vulnerable groups and individuals from the undue hardships of high interest rates and coercive means of recovery by the MFCs or money-lending agencies.
"I received a letter from the RBI (Reserve Bank of India) on Tuesday. The letter says that the RBI monitors the activities of non-banking financial companies (NBFCs) and micro finance institutes. And as such the State government doesn't need to enact any law to this effect.
"Unfortunately, despite strict guidelines from the RBI, the MFIs in the State don't adhere to the same. We're going to write a letter to the RBI Governor to let him know that the Bill introduced on Monday is a property of the Assam Legislative Assembly. How come the RBI interferes in such a matter? If there is any error in the Bill, the Government of India can instruct the State Governor not to give his assent to the Bill.
"The Bill has been brought also to regulate the MFCs with an effective mechanism. This regulation will also not allow the borrowers to take loans and the lenders to lend loans in an uncontrolled manner. The lenders will have to obey certain conditions for lending loans and recovering them.
"The main complaints against the MFIs from the common people are that they (MFIs) use agents who forcibly recover loans and often manhandle the borrowers and charge high rates of interests.
"Now on, the MFIs will not be allowed to engage agents for loan recovery.
"All the MFIs operating in the State will have to register themselves with the authority concerned."
According to the Act, the MFIs must maintain cash books, ledgers and such other books of accounts in the prescribed manner. They will have to obey all the guidelines issued by the RBI (Reserve Bank of India).
All schedules of loan repayment shall be made by the borrower at the offices of Gaon Panchayats (GPs) or at the public places designated by the Deputy Commissioners (DCs).
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