By Admin 
Shares Crash: Shares of these microfinance loan companies like Utkarsh Small Finance Bank, Fusion Finance and L&T Finance are in bad shape today. Their shares have fallen by 3-10 percent in the day’s trading. The reason behind this fall in shares is a step taken by the Bihar government. Actually, in Bihar the government has imposed strict rules on microfinance companies (small lending institutions).
- According to the new rules imposed by the government, from now on microfinance companies will have to register separately with the Bihar government, even if they have a license from RBI.
- Under the new rules, companies will no longer be allowed to recover more than the principal amount from the borrower. That means, if you have given a loan of Rs 10,000, then the interest amount should not be more than this.
- Now companies will have to take permission from the state finance department before giving loans, under which the government will see whether the person or institution taking the loan has more debt than before.
- Rules on loan recovery have also been made strict. Due to this, if any company threatens to extort recovery, it will be considered criminal. The purpose of these rules is to stop the arbitrariness of companies or to save poor borrowers. If any company is found extorting money, immediate action will be taken against it.
- The government has also fixed the loan limit. Under this, a person will be allowed to take loan from maximum two companies at a time. Its purpose is to save people from the debt trap.
decline in shares
- Shares of Utkarsh Small Finance Bank are seen trading at Rs 14.35 with a decline of 3.1 per cent, which is much lower than its IPO price.
- Shares of Fusion Finance have slipped by 10 percent. It is trading at Rs 184.73, almost half its IPO price Rs 368.
- Shares of L&T Finance are also trading 3.2 percent down at 290.35 on Friday.
Disclaimer: (The information provided here is being given for information only. It is important to note here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. ABPLive.com It is never advised for anyone to invest any money here.)
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