SKS Microfinance on Thursday challenged in the Supreme Court the special Act passed by the Andhra Pradesh government to regulate microfinance institutions in the state, following allegations that their high interest rates and strong-arm recovery methods led to suicides by farmers.
A bench of justices Markandey Katju and Gyan Sudha Mishra issued a notice to the state government, directing it to file a reply and posted the matter for hearing in the third week of July. Senior advocate Fali S Nariman, appearing for SKS, submitted the state government had no power to regulate the sector. The state government had passed the Andhra Pradesh Micro Finance Institutions (Regulation of Money lending) Act, 2010, to ensure it had oversight on the sector.
