Raijor Dal demands implementation of law to curb MFIs in Assam

Guwahati: As the budget session of the Assam Assembly began on Monday, opposition Raijor Dal reiterated his demand for the implementation of the Assam Microfinance Institutions (Money Lending Regulation) Act 2021, which will bring aid to hundreds of thousands of women in the state.

The party claimed this law is vital now as people are in extreme economic distress due to the current pandemic and repeated lockdowns, and the situation has been exposed by reports that people have had to sell their kidneys. to repay their loans from microfinance institutions (MFIs) in the state.

“The Morigaon incident revealed the situation of the population. The illegal kidney trade is rampant there, as people are forced to sell their kidneys to pay for their children’s treatment, loan payments to MFIs, etc. Raijor Dal vice president Russel Hussain said at a press conference here.

An illegal kidney racket was dismantled in Morigaon district on Sunday and two people were arrested.

Police say at least six people from one village were lured in with money to donate their kidneys to a hospital in Kolkata.

Hussain further said the pandemic and lockdowns had further compounded people’s problems and that the BJP’s pre-survey promise to forgo MFI loans for all female borrowers was a beacon of hope for them.

“If the law is enforced, all borrowers will benefit, as promised by the BJP. But now they put runners to be a beneficiary and that would deprive a lot of the women, ”he said.

Also read: Microfinance services cannot be cut off from society

The bill was passed by the State Assembly on December 30 last year and the governor signed the notice in the gazette on January 27, but the state government has yet to have it. implemented.

Raijor Dal chief stressed that if implemented, it would automatically lead to the forgiveness of all loans and that the state government did not need to pay out of its coffers to MFIs.

The law will also prevent harassment of borrowers by lenders, as it would result in jail time and a fine if the lender indulges in it, and will also ensure that agents cannot visit borrowers’ residences, demanding repayment.

The law to curb MFIs was drafted and passed when the current chief minister, Himanta Biswa Sarma, was finance minister in the previous government.

The new state government, at its very first cabinet meeting on May 11, had formed a committee to assess the financial implications of waiving loans from MFIs.

The committee, after its initial investigations, revealed that an amount of Rs 12,500 crore, including principal and interest, was unpaid as of March 31, 2021, involving 26 lakh clients and 40 lenders.

The amount was later reduced to Rs 8,250 crore by the government after discussions with MFIs, as many loans were made in defiance of RBI standards.

It was decided that the state government would repay the loans on behalf of the eligible beneficiaries.

Several conditions were recommended by the committee, such as only loans taken out before December 31, 2020, and those with a family income of Rs a lakh, paying income tax, owning four-wheeled vehicles or any other such directive set by the RBI will not be considered for a loan waiver.

“All of these conditions will be canceled if the law is implemented, and we sincerely hope that the state government will do so soon,” Hussain added.

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