Facts of the day – 18th Feb 2025

Last Updated on February 20, 2025

MFIs in Karnataka

1. Q 3. Whether loans for consumption (i.e., for buying gadgets, meeting expenses on ceremonies, etc.) without collateral would be treated as microfinance loans?
   Ans. All collateral-free loans to individual/s belonging to low-income households, i.e., households having annual income up to ₹3,00,000 are treated as microfinance loans.
2. Q 4. If a loan is backed by hypothecation of any security (gold, equipment, white goods, underlying assets etc.), will this loan be considered collateral-free and classified as a microfinance loan?
   Ans. Loans backed by hypothecation of any security shall not be treated as microfinance loans.
3. Q 5. Whether the instructions related to limit of 50 per cent on monthly loan repayment obligations of a household as a percentage of monthly household income apply to non-microfinance loans given to low-income households?
   Ans. Yes, for providing a non-microfinance loan to a low-income household (as defined under the directions), it should be ensured that the limit of 50 per cent on monthly loan repayment obligations of a household as a percentage of monthly household income is not breached. In other words, the limit of 50 per cent shall include both microfinance as well as non-microfinance loans.
4. Q 10. Is the practice of calling a borrower before 9.00 am and after 6.00 pm being considered as harsh practice only for recovery of overdue loans or also for normal conduct of business?
   Ans. This clause is applicable only for recovery from borrowers having overdue loans. For other borrowers, REs can continue with the existing timing/ process for business like group meetings, collection in regular accounts, etc. as per borrowers’ convenience.
5. The total gross loan portfolio of MFIs in Karnataka – the fourth largest market for microlenders – surged from ₹16,946 crore in March 2019 to ₹42,265 crore in 2023-24, as per the data given by MFIs. The average loan per client in Karnataka is ₹44,036.
6. He acknowledged that that news reports point to 34 cases of harassments associated with MFIs, 18 pertaining to collection methods and one of excess lending. When pointed out that the state had also seen 12 suicides between May and December, beside the two this month, he argued, “The prime reason would be some family dispute. It is not as if they are taking loans from only regulated MFIs.”
7. The industry bodies’ representatives attributed the defaults to informal lenders in areas like Ramanagara who ask for up to 40% interest rate per week on loans. On the other hand, they underscored, regulated entities lend at 19-25% interest rate.

GIMs Karnataka

1. During the Invest Karnataka 2025-Global Investors Meet, the state attracted Rs 10.27 lakh crore worth of investments that are expected to create 6 lakh jobs, Industries Minister MB Patil said on Friday.
   The investment commitments amount to Rs 4.03 lakh crore, while memorandums of understanding (MoUs) signed amount to 6.23 lakh crore, totalling the promised amount. Of the total amount, at least 70% is expected to be realised, said Patil during a media briefing after the conclusion of the GIM.
2. Data shows that between 2013-14 to 2024-25, the SHLCC cleared 260 projects worth Rs 6.45 lakh crore. As of November 2024, less than half of these projects valued at a quarter of the total investment promised – 106 worth Rs 1.65 lakh crore – was implemented. While 34 projects were dropped, 120 were ‘under implementation’.

Judicial System in India

Rajdeep Sardesai has told the dark reality of our Judicial System through the example of Arnab Goswami & Siddik Kappan.

It takes a lot of courage to say this, only @sardesairajdeep can say this 🔥 pic.twitter.com/d7GXNoAl7H

— Harsh (@harsht2024) February 17, 2025