In what could bring relief to lakhs of families indebted to moneylenders, the State government on Friday announced the Debt Relief Bill, 2018. This will enable one-time discharge of loans availed from moneylenders at high interest rates.
Invoked after nearly four decades in the State, the government announced promulgation of an ordinance on this, which needs the assent of the President. “Private moneylenders are charging exorbitant interest rates, fuelling agrarian and debt crises,” said Rural Development and Panchayat Raj Minister Krishna Byre Gowda, speaking after the Cabinet meeting on Friday. “This will benefit lakhs of people who are not covered by the farm loan waver.” This measure will also benefit landless labourers, small farmers, and vulnerable sections of society.
The Debt Relief Act was promulgated in Karnataka in 1976, when the late D. Devaraj Urs was Chief Minister.
“We will recommend to the President to give assent to the ordinance as part of drought-relief exercise,” Chief Minister H.D. Kumaraswamy told reporters here on Friday.
He said the provisions of the proposed law will not applicable to micro-finance institutions, non-banking finance institutions and others who come under the ambit of the RBI Act. “Disputes currently pending in the courts will also come under the provisions of the proposed law,” he added.
The government has said families with an annual income of up to ₹1.2 lakh can avail this benefit. “Any amount taken from moneylenders, private institutions, and pawnbrokers are eligible for the scheme,” Mr. Kumaraswamy said. Once the ordinance is promulgated, moneylenders have to declare details of loans given. Any violation will attract one-year jail term and a fine of up to ₹1.25 lakh. When asked if this would lead to legal tangles, he said, “When Karnataka and Tamil Nadu implemented it in the past, many went to the Supreme Court. The court, however ruled in favour of the Act.”
