Udaipur- In a powerful demonstration of unity and determination, women and villagers from tribal dominant Kotra block of Udaipur district came together on Monday to protest against the exploitation and harassment they faced from microfinance companies. They gathered at the district police headquarters to submit a memorandum to Inspector General of Police, Udaipur Ajaypal Lamba, demanding immediate action.

These microfinance companies have been accused of subjecting women to various forms of harassment and exploitation. Despite repaying their loans, women allege that the lenders continue to harass them for more money, often resorting to verbal abuse, threats, and even physical intimidation. The lenders are reported to make frequent visits to borrowers' homes, often during late hours, demanding repayment and creating an atmosphere of fear and coercion.

Additionally, women have complained that the lenders do not provide receipts for the installment payments made, nor do they update their passbooks accordingly, making it difficult for borrowers to track their payments. Furthermore, some borrowers claim that lenders have attempted to molest them or have threatened them with kidnapping if they fail to pay additional sums.

Hansadevi Garasia of village Maula, recounted her distressing experience with a loan from Namra Finance, explaining that on the evening of January 12th, an employee named Rajkumar visited her home to collect the installment. When she requested him to collect the money from her cousin instead, Rajkumar reportedly became aggressive, hurling verbal abuses at her. He then grabbed and pulled her sari, causing her to fall down. Hearing her screams, her mother-in-law rushed to her aid, at which point Rajkumar left, threatening to return later. Hansa said she gave a written complaint at the Mandwa police station and demanded action from the IGP.

Other villagers collectively complained that employees of Sindhuja Micro Credit Pvt. Ltd., Satin Creditcare Network Ltd., Digambar Finance, and Ashirwad Micro Finance Ltd., along with Namra Finance, Bharat Finance, and RBL Bank, have formed groups targeting women, trapping them under the guise of offering loans at easy interest rates and flexible payment schedules.

Prabhulal Bhagora, an office bearer of the Communist Party of India (Marxist), Udaipur explained that due to the poor economic conditions of tribals in rural areas and the lack of adequate government banking facilities, women often resort to taking loans from micro finance companies. Most of the women from tribal communities are illiterate or uneducated in the area and hence become easy prey. The companies typically disburse 30 to 60 thousand rupees as loans to women borrowers. The instalments are received on weekly or monthly basis. However, when these women make installment payments, they often do not receive receipts, and the payments are not recorded in their passbooks. Moreover, employees typically demand repayment between 5 to 8 pm, and even after repayment, they continue to harass, abuse, and threaten the women with molestation or kidnapping if they fail to provide more money.

This type of loan fraud has victimized people in various villages, including Jal, Nayar, Pipla, Kundal, Gadi Saran, Kantariyaan, Punavali, Khokharni, Poonawali, Bhachala ki Amli, Tandla, Wakli, Sulav, Juda, Dantral, Dadmiya, Kanapadar, and others. Unfortunately, microfinance companies often employ aggressive tactics to intimidate and threaten borrowers.

CPI(M) District Secretary and lawyer Rajesh Singhvi told The Mooknayak that people are being pushed into financial distress due to their entanglement with microcredit companies. In many cases, individuals burdened by debts and facing threats from company employees resort to drastic measures like suicide. Despite the rampant malpractices of finance companies, there is a lack of effective monitoring by the district administration and police. Singhvi urged the police and administration to take decisive action to curb the predatory practices of microfinance companies, expand the number of banking branches, and safeguard the livelihoods of the people.

The Inspector General of Police assured the complainants of action and relief. Present at the occasion were numerous women who had been victimized by microfinance companies, including Varki, Savi, Rupi, Shanti, Kelly, Lali, Badli, Mani, Megi, Amiya, Lali, Chandrika, Leela, Kailash Ben, Lali, Mungali, Hitari, Sita, Badi, Kamli, Samina, Vijri, Homi, Dharmi, Kali, Varja, Hira, Movni, Jeetu, Bani, Sanu, Sharda, Vaji, Ransi, Thawari, Hansa, Sanju, Shardi, Janti, Mungali, Sugana, among others.

RBI Guidelines for Ethical Loan Recovery Practices

The Reserve Bank of India (RBI) has laid down certain norms regarding loan recovery practices for financial institutions, particularly focusing on the behaviour of recovery agents employed by these institutions, known as Recovery Entities (REs).

These guidelines aim to ensure fair and ethical debt collection efforts. According to these norms, REs must strictly adhere to guidelines prohibiting any form of intimidation or harassment during debt recovery processes. This includes refraining from actions intended to publicly shame or invade the privacy of borrowers' family members, referees, or acquaintances.

Additionally, REs are prohibited from sending inappropriate messages via mobile or social media, making threatening or anonymous calls, or persistently contacting borrowers outside permissible hours (before 8 a.m. or after 7 p.m.). Furthermore, providing false or misleading representations during loan recovery attempts is strictly prohibited. These guidelines serve to protect borrowers from unfair practices and uphold the principles of ethical lending and debt collection.

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