Private microfinanciers hesitant to register with authorites

BENGALURU: The government has ordered compulsory registration of private finance companies to curb illegal financial business. However, despite the government’s stringent order, not a single private finance company in Bengaluru has registered so far.

The government had issued a notification to financiers and had made registration mandatory for private finance companies. However, the companies seem to be ignoring the orders purposefully. The administration had set a deadline for registration, but it has not been enforced.

The government had also warned people against taking loans from companies that charge exorbitant interest rates. Despite this, people continue to borrow from these companies, and the government’s efforts to curb financiers seem to be going in vain.

Deputy Commissioner Jagadish said that no deadline is set for registration yet. “Finance companies, which have not been registered under the guidelines of RBI, need to get permission. But no one has applied for registration so far. If they apply, the authority will give permission to the finance company in 30-days. Therefore, there is no time limit, so people have to be careful while taking finance in terms of security”, he said. The D also said it better not take loans from companies that charge high interest.

“If any private micro-finance companies are running without registration, the authorities will take suitable action against them. If the government does not enforce the bill, it is difficult to control moneylenders. Strict action should be taken regarding this”, the DC added.