HC puts off hearing in plea against MFI Ordinance to Friday

The State High Court on Wednesday adjourned hearing on a writ petition challenging the constitutional validity of the Ordinance issued by the State Government to regulate Micro Finance Institutions (MFIs) to Friday.

While accepting the petition filed by MR Rao on behalf of SKS Microfinance Limited on Tuesday, the court directed the state government to clarify its stand on actual interest and minimum interest charged by the finance institutions by Friday.

In his petition, Mr MR Rao contended the subject was within the purview of the Reserve Bank of India and the State government and Legislature had no powers to pass a law in this regard.

Meanwhile, the RBI constituted a sub-committee of its Central Board of Directors to study the issues and concerns relating to the MFIs including the “ways and means of making the interest rates charged by them reasonable.”

The committee is headed by YH Malegam would submit its report in three months to the government.