Virudhunagar Collector R. Kannan has warned all banks and financial institutions in the district against any action violating RBI guidelines on loan moratorium.
The warning came on Saturday following Rajapalayam MLA S. Thangapandian’s complaint that private finance companies were pressuring members of women self-help groups to repay loans with interest despite the moratorium.
Mr. Thangapandian said he received several complaints from women SHG members about a private microfinance institution that insisted on repayment of loan with interest. “I immediately visited the manager of the institution and pointed to RBI’s six-month moratorium.”
The SHG members women said they were getting knocks on the doors seeking repayment. “Similarly, some of them complained that representatives of the financial institution threatened to lock their shops for non-payment,” Mr. Thangapandian said.
Pointing out that both men and women had lost their jobs in the last two months, he feared that any distraint proceedings could lead to untoward incident. “We are not against repayment of loans by those who can afford it, but only against putting undue pressure on jobless people.”
The MLA met the Collector on Saturday and wanted the district administration to warn all banks and financial institutions against any action violating RBI norms.
Consequently, the Collector issued a warning to all nationalised and cooperative banks and microfinancing institutions against any coercive action. “We have so far given ₹8.5 crore special loan for SHGs affected by the lockdown,” the Collector said in a statement.
Mahalir Thittam was ready to provide additional loans to them, he added.