Mandya DC bars banks, MFIs from forcible loan recovery amid drought

Mandya Deputy Commissioner Kumar has directed banks and financial institutions in the district to stop forcible recovery of loans from farmers and the public, citing the drought conditions prevailing across all seven taluks.

In a statement issued on Monday, the Deputy Commissioner said farmers, agricultural labourers, small traders and members of the public in the district are under severe financial distress. Five of the district's seven taluks have been declared severely drought-affected, while Maddur and Pandavapura have been classified as moderately affected.

Mr. Kumar said complaints had been received from the public that some banks, microfinance institutions and housing finance institutions were pressuring borrowers to pay loan instalments and resorting to forcible recovery measures.

Citing a letter from the Secretary to the Government, Department of Finance, and the Reserve Bank of India's Standard Operating Procedure, he said all banks, MFIs and housing finance institutions operating in the seven taluks are strictly directed not to undertake any form of forcible recovery, harassment, intimidation or unnecessary pressure against borrowers for as long as the drought situation prevails during the monsoon season.

Borrowers must not be subjected to threats, pressure, harassment, humiliation or any other form of undue pressure for repayment of instalments, he said. Financial institutions have also been told to ensure that their recovery staff, agents and representatives comply strictly with the instructions.

The Deputy Commissioner warned that appropriate action would be taken against those found violating the directions, in accordance with the laws and rules in force.