SC rejects advocacy requesting instructions from the Center to enact a law on the conduct of microfinance institutions, banks, NBFCs
The Supreme Court on Tuesday asked the petitioner to contact the Center to enact a law on the conduct of microfinance institutions, banks / NBFC, in order to regulate them and prevent them from using illegal, harassing and violent methods against their clients to Recovery.
A three-judge bench consisting of Justice RF Nariman, Judge Hemant Gupta and Judge BR Gavai said the petitioners can make representation to the relevant ministry to redress their grievances. “The written request is rejected because withdrawn”, noted the judiciary in its order.
During the hearing, lawyer Vishal Tiwari argued that microfinance institutions, banks and non-bank financial corporations (NBFCs) use force and force to collect loans. There is no specific law or strict guidelines to verify them. People commit suicide because of their harassment and the vehicles, which are on the finance, are forcibly taken by the credit institutions.
The Court heard the plea requesting the issuance of specific instructions to enact a law for the conduct of MFIs / NBFCs and instructions to the RBI and the government to regulate and prevent money lending (MFIs) from using funds. Harassment and illegal methods for collection from borrowers and to ban MFIs that are not registered with the RBI.
The petition was filed by Vikram Sharma, Dheerendra Shukla, Rajesh Sharma and the NGO Save Them India Foundation, which also called on the government to enact a law in Parliament in accordance with and implementation of the suggestions made by the Supreme Court of India. in ICICI v Prakash Kaur et al. in Criminal Appeal No. 267 of the 2007 judgment of 26-2-2007, to regulate the conduct of microfinance institutions, including digital lending applications and NBFCs.
He further urged the government to prevent the violent and harassing methods used by banks (IMF / NBFC) and to take strict measures against them. He asked to ensure that strict instructions and sanctions are imposed on these institutions to curb these unconstitutional and arbitrary practices which violate the directives and directives issued by the Ministry of Finance.
The petitioner argued that the inaction of the financial authorities as well as his uncontrolled policies relating to microfinance and other banking regulations have led to arbitrary and exploitative practices against borrowers. The high amount of interest rates along with the exorbitant hidden and additional costs in the form of margin money and insurance premiums have placed a heavy financial burden on borrowers. These costs imposed on the principal amount burdened the disposable income of the citizens.
“As a result, the default of these installments by the borrowers has been countered by severe humiliation and threat of appeal to the loan collection mechanism by these institutions. Such existing practices have led to the violation of the right to dignity and the means of subsistence under the right to life (article 21) and have been seriously violated by the state entity ”,
-HE ADDED.