Comments
The Andhra Pradesh Government has engaged top advocate Mr Prashant Bhushan to defend its MFI Act in the Supreme Court.
SKS Microfinance Ltd had last week filed a petition in the Supreme Court challenging the AP Microfinance (Regulation of Moneylending) Act 2010.
“We basically feel that the petition is not maintainable as a case has also been pending in the AP High Court since October last year. On the simple procedural grounds it may not stand,'' a top Government official told Business Line .
However, the Government does not wish to take any chance and has hence roped in Mr Prashant Bhushan as legal counsel, he added.
The AP MFI Act came in the wake of uproar over harassment of clients by recovery agents of microfinance institutions (MFIs) and collection of high interest rates up to 60.5 per cent on micro loans to the poor.
“We have all the evidence to support the Act and also the Constitutional mandate,'' the official said.
The Act had prohibited multiple lending while prescribing that the dues should be collected only in public places. These, among other rules, brought disbursement of fresh loans and collection of dues to a complete halt.
While the total outstanding loans from MFI clients is around Rs 10,000 crore according to the State Government data, the only listed MFI in the country SKS Microfinance alone has Rs 1,287-crore outstanding loans.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.