Bengaluru, Jan 30 (PTI) The Karnataka government on Thursday decided to review the provisions of the ordinance drafted with the aim of preventing harassment of borrowers by microfinance institutions and implementing a strong law as soon as possible.

A team of senior officials from the Law and Finance Departments has been formed in this regard, an official statement issued by Chief Minister Siddaramaiah's office said.

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"A strong law is being drafted with the aim of preventing harassment faced by borrowers and controlling forced recovery by lenders," the note said.

The decisions were taken at a meeting chaired by Siddaramaiah where senior ministers and officials were present.

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The meeting was convened following complaints about microfinance companies harassing borrowers. Many people committed suicide or fled their houses. There were also reports that the microfinance companies have put many houses for auction.

It was decided in the meeting that the police will be given more powers in the law and an ombudsman will be appointed.

"Those who inhumanly forcefully recover loans will get the opportunity to be punished and fined, including filing a non-bailable case," the statement read.

The CM told the officials that there are many options in the current law to control microfinance harassment, but they are not being implemented properly.

The police should register a case on their own initiative without waiting for a complaint to be lodged, he said.

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