PIL plea against forcing SHGs to repay loans and interest

The Madras High Court on Wednesday sought the response of the State government and the Reserve Bank of India (RBI) to a public interest litigation petition filed by an office-bearer of the All-India Democratic Women’s Association (AIDWA) to restrain micro-finance institutions from demanding repayment of loan and interest by self-help groups (SHGs) during the lockdown.

Justices M.M. Sundresh and R. Hemalatha ordered notices, returnable by four weeks, on the writ petition filed by AIDWA State secretary S. Suganthi. The petitioner’s counsel, C. Karl Marx, also urged the court to order extension of the moratorium period from September 1 to February 28, 2021, and to direct the RBI to frame rules preventing the demand of exorbitant interest.

He claimed that many micro-finance institutions were forcing SHGs to repay loans and the interest amounts, despite the RBI having issued circulars extending the moratorium period till September 1.

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