The Karnataka Debt Relief Act, which promises to waive all personal borrowings, is likely to emerge as a damp squib given the challenges concerned in its implementation. Former chief minister H D Kumaraswamy had hailed the law’s passage, which acquired Presidential assent in July, as his “parting present.” But even as the Pawnbrokers and Jewellers Association, Karnataka, has approached the court docket challenging the law, lack of clarity on whether or not it’s miles applicable to licensed or unlicensed money-creditors, or each, has compounded the problem. Officials estimate that borrowers owe Rs 850-900 crore to pawnbrokers, with a purpose to be waived if the Act “surpassed in haste” is applied.
Speaking to DH, Mrudul M Vaishnav of the Association stated that Karnataka High Court had issued an order stopping lenders from submitting their debt facts to assistant commissioners, who’re the nodal officials below the scheme. Due to the order, creditors can put up their info most effective after October 15, while the last filing details turned into October 22. “The Association has additionally questioned how the Act become applicable to them when Non-Banking Financial Companies (NBFC) who function on the identical model and levy the equal rate of hobby had been exempt from the Act,” he said.
According to Cooperation Department records, there are five 810 registered moneylenders in Karnataka, 8,314 pawnbrokers, and 8,797 economic institutions registered and regulated underneath Karnataka Money Lenders Act 1961. Panduranga Garag, Joint Registrar of Co-operative Societies (Legal Cell), stated that the excessive court order averted officials from taking any coercive action to force the Action. Noting the curbs imposed by the courtroom, he stated that lenders loans might be waived after filing the required facts as according to the Act.” Assistant Commissioners will listen to the instances and dispose of them inside a year,”
he said. However, resources within the Department stated that the assertion made in July before Kumaraswamy stepped down changed into “mere publicity” and became not realized. “Registered pawnbrokers have approached the courtroom as they might acquire nothing for the loans they have got superior. Not many human beings who have taken loans from unregistered money creditors will come forward fearing retribution,” assets stated. Meanwhile, there are also proceedings that touts are drawing close borrowers and promising them to make certain that their loans are waived for a fee. But officers say beneficiaries need to refrain from coming near touts because the Act’s implementation still stays a long way-fetched.