Banks to offer loans to victims of blade mafia

Commercial banks may offer loans of up to Rs.50,000 to victims of moneylenders to free them from the clutches of the so-called blade mafia.

A recommendation to this effect was made by a subcommittee formed by the State Level Bankers’ Committee and the banks were expected to launch such a scheme in a week’s time, Home Minister Ramesh Chennithala told the media here on Thursday.

The scheme would enable the common man to pay up high-interest loans taken from registered moneylenders, stock brokers, and others. The beneficiary would be required only to produce photocopies of documents and a certificate from a government official regarding their debts and sources of income. The bank would directly pay the moneylender from the proceeds of the loan. The loan would be repayable in five years and would carry only the base rate of interest.

The Minister said he would soon write to the banks to enhance the loan amounts to Rs.1 lakh. Mr. Chennithala said the government was intensifying action against the blade mafia. Strong action was also contemplated against use of drugs which was increasing in the State.

He said that more than 1,000 cases had been registered and 586 persons arrested as part of the fortnight-long Operation Kuberan against blade companies.

Mr. Chennithala said he was receiving complaints against Non-Banking Financial Companies (NBFCs). He said police action would be initiated if they did not comply with the Fair Practices Code stipulated by the Reserve Bank of India. Action would also be taken against micro-financing companies if they charged exorbitant interest rates.