Bihar to enact legislation on MFCs on lines of AP

PATNA: Bihar government was mulling a proposal to enact a legislation on the pattern of Andhra Pradesh to regulate and have effective control over Micro Finance Companies in the state.

Replying to a short-notice question of BJP member Tar Kishore Prasad in the state Assembly, Deputy Chief Minister S K Modi said the SP in Katihar district was probing the case where a Micro Finance Company had allegedly subjected several debtors to "inhuman torture" for realisation of a piece of land under Dandkhora block in the district.

To a supplementary, he said there was no guideline set by the RBI to rein in the activities of such financial institutions and added that the Centre is planning to bring a bill for regulating these institutions.

He said his government was also mulling a proposal to enact a law to effectively regulate and control Micro Financing Institutions on the pattern of Andhra Pradesh.

Later, replying to a starred-question of Amrendra Pratap Singh (BJP), Modi said the state's annual credit plan for the next financial year would stand at Rs 40,500 crore which was up by almost Rs 3000 crore from the target fixed for the current fiscal.

The low credit ratio has been a contentious issue for long between successive state governments and bankers, he said adding, "We are consistently trying to further improve the CDR and holding regular meeting of state level bankers committee exhorting the need for achieving their respective targets."

To another question, he said the state government had decided in principle not to park its funds in any of the private banks as they were not cooperating in the task of improving the CDR, he said.