AP to challenge Supreme Court relief for SKS Microfinance on resuming ops

Govt decided to challenge order given to SKS Microfinance to resume operations in state.

The Andhra Pradesh government has decided to challenge the Supreme Court interim relief order given to SKS Microfinance for resuming loan operations in the state. The SC order says that the company has to adhere to the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act,2011,with respect to new loan disbursements,interest rates and recovery practices.

Speaking to FE,Reddy Subramaniam,principal secretary,rural development,Andhra Pradesh government,said,The interim relief came without any notice to the state government,which is the main party in the SKS case. We could have clarified if we were informed earlier as in any special leave petition (SLP) cases. Hence,we have decided to challenge the interim relief order at the earliest.

Reddy clarified that there was no blanket ban on the company to stop operations. We only suggested that the company has to abide by the state regulations to carry out their operations, he said. We have neither arrested anybody so far as claimed by the company and not stopped them from recovering their dues from borrowers, he said.

Story continues below this ad

The state law,the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act,2011,defines that no company should use any coercive methods or any mode of harassment on borrowers.

More than 80 suicide cases have been reported in the state due to harassment by the microfinance institutions due to bad recovery methods. Incidentally,the District Rural Development Agency (DRDA) had also cancelled the registration of SKS Microfinance in Mahabubnagar district for allegedly not following rules.

Recently,insurance regulator Irda also slapped a penalty of R50 lakh on SKS,which collected extra funds,apart from the premium,as a corporate insurance agent without proper disclosure to policy holders.

Recently,the Andhra Pradesh HC division bench dismissed the petitions filed by SKS and other microlenders against the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act,2011. The company then moved the apex court. Also,the SC asked the AP government not to take coercive steps against the company.

UK to Andhra, scamsters targeting Tirupati Balaji devotees, temple trust jumps to action

India2 hr ago

The TTD has issued a warning to devotees about online fraudsters offering fake services such as hotel bookings, free darshans, and Kalyanam events. Strict action is being taken against those involved in such scams, including those operating from abroad. Complaints have also been received about unauthorized use of TTD's name and logo, and promises of free items in exchange for payments.

View all shorts

Live Blog