Banks, MFIs warned against forcing SHGs to pay dues

Coimbatore District Collector S. Nagarajan has warned of action against banks and micro finance institutions (MFIs) that pressurise self-help groups (SHGs) to pay dues.

In a release, Mr. Nagarajan said it had come to the district administration’s knowledge that private banks and MFIs were pressurising SHGs to repay loans during the pandemic period.

Affected by the lockdown, the SHGs had had their livelihood affected.

In such circumstances, the private banks and MFIs should give them time to service the loans and avoid pressurising them.

They should also stop levying penal interest.

To address the issue, Mr. Nagarajan said he had constituted a team comprising project director, lead bank manager, and assistant project officers of Magalir Thittam, who were looking into complaints.


The district administration in Salem and Namakkal also advised financial businesses to not insist on women SHGs to pay loan dues. In a release issued by the respective District Collectors, they said the livelihood of the public had been affected due to the lockdown.

The district administration had been receiving complaints that financial businesses had been threatening and demanding women SHGs to repay loans during the pandemic period.

Stern action would be taken against such businesses, the release said.

In Namakkal, the district administration said women SHGs could file complaints through 94440 94133, if any of them were asked to pay loan dues.


The district administration has urged banks and non-banking financial institutions to shun harsh measures for loan recovery.

At a consultative meeting held with the banks through videoconferencing, Collector V. Jayachandra Bhanu Reddy cited the pandemic as a cause of economic distress to the public.

In its wake, incomes have fallen forcing public into an economic distress.

Banks and non-banking financial institutions that had lent to the public are called upon to go easy on credit collection with the lockdown in place and the freezing of incomes.

The Collector also urged the banks to follow the Reserve Bank of India’s Resolution Framework 2.0 for credit lending guidelines during the pandemic. Further, the banks shall also ensure credit flow to all eligible farmers, he said.

Regional Manager, Indian Bank R. Thirumavalavan and District Lead Bank Manager R. Mahendran were present along with the representatives of banks and lending institutions.


Collector S. Dhivyadarshini has warned against forcible collection of interest payment from SHGs by banks and other credit lending institutions in the district.

Banks and non-banking credit lending institutions may collect money from those willingly coming forward to pay up their monthly interest payments.

However, no coercive action shall be taken against others pushing them to pay. Further, adequate time shall be given to the loanees to pay up, she said.

Public may contact the administration’s various control room numbers to lodge complaints against lending institutions that adopt illegal, coercive measures.

People can contact the administration’s Whatsapp number on 9360953737/ 04342-230067/ 04342-231508/ 04342-1077.

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