SKS Microfinance Limited would soon be back in business in Andhra Pradesh. It told the BSE on Thursday that it intends to carry on lending operations in the State in accordance with the recent order of the Supreme Court.
The company said an appeal filed by it challenging the judgment of the AP High Court on the constitutional validity of the AP Micro Finance Institutions (Regulation of Money Lending) Act, 2011 (AP MFI Act), had come up for hearing before the Supreme Court on March 18.
“The Supreme Court, by its order, directed that the interim orders issued by the High Court of Andhra Pradesh dated October 22, 2010 as modified by the order dated October 29, 2010 shall continue pending further orders of the Supreme Court,” the company said in its filing with the BSE.
The Supreme Court also made it clear that if the company complies with the said orders of the High Court, no coercive steps can be taken against the company, the company said.
“The interim order of the High Court dated October 22, 2010 permits the company to carry on business by due adherence to Sections 9 and 16 of the AP MFI Act, which prescribes the ceiling on amount recoverable on loans in respect of interest and provides the penalty for any coercive actions. The Supreme Court has issued notice to the State government,” the filing further said.
The company will be staging a comeback, about two years after the AP government brought stringent law to regulate the microfinance industry following spate of suicides by borrowers.
