Panel to probe into micro finance irregularities

The Andhra Pradesh government constituted a committee on Monday to look into the allegations and counter allegations against some micro finance institutes as well as district-level authorities in the state.

Chief minister Y S Rajasekhara Reddy reviewed the decision of Krishna district authorities, who have allegedly closed down 54 branches of micro finance operators in and around Vijayawada, mainly belonging to 'Spandana', a micro finance organisation, under the provisions of the AP Private Money Lenders Act, alleging that they were collecting high rates of interest and indulging in forced recoveries.

While state finance minister K Rosaiah has been entrusted with the job of suggesting alternative measures to ensure compliance of micro finance operations with the government's objectives, the government has deputed senior bureaucrat V P Jouhari to inquire into the complaints made by the micro finance companies against Krishna district collector Naveen Mittal and the project director of the District Rural Development Authority.

According to an official report, the district authorities have closed down 40 of the 46 branches of Spandana, which were operational in the district. Based on similar allegations in Krishna district, the authorities have also closed down 14 of the 40 branches of Share Micro Fin.