SKS plans to resume lending operations in Andhra Pradesh soon
Hyderabad: Country's only listed micro lender SKS Microfinance Thursday said it plans to resume lending operations in Andhra Pradesh soon, two years after the state government came out with a stringent laws to regulate the industry.
SKS Chief Financial Officer Dill Raj said the recent Supreme Court's interim order was of great relief to them and paves way to resume operations in the state.
"That is primary relief we got (from the Supreme Court order). We plan to carry out our business in Andhra Pradesh strictly in compliance with the Supreme Court order. We will adhere to those two sections. Also, we will comply with the Reserve Bank Rules," he said,
When contacted, R Subrahmanyam, state Principal Secretary, Rural Development, said the Andhra Pradesh government is going to file a detailed affidavit with Supreme Court.
"We have not been issued any notice by the Supreme Court in this case. As far as our interpretation goes, Supreme Court did not set aside AP MFI Act," Subrahmanyam said.
The Supreme Court only said no coercive measures should be taken by the state government, he added.
Dilli Raj said, SKS has 122 branches in the state and 1,200 people are working. "Now we are getting our plans ready for fresh lending. May be in two to three days time, we should be ready with the plans," he added.
Meanwhile, shares of SKS closed at Rs 119.60, down 10.58 percent over their previous close on BSE.
In a separate filing with bourses, SKS Thursday said an appeal filed by the company challenging the Judgement of the Andhra Pradesh High Court on the constitutional validity of the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Act, 2011 ("AP MFI Act") came up for hearing before the Supreme Court of India on March 18.
“The Supreme Court by its Order directed that the interim orders issued by the High Court of Andhra Pradesh dated October 22, 2010 as modified by the Order dated October 29, 2010 shall continue pending further orders of the Supreme Court,", it said.
The Supreme Court also made it clear that if the company complies with the said orders of the High Court, no coercive steps can be taken against the company, SKS said.
"The interim order of the High Court dated October 22, 2010 permits the Company to carry on business by due adherence to Sections 9 and 16 of the AP MFI Act, which prescribes the ceiling on amount recoverable on loans in respect of interest and provides the penalty for any coercive actions.
"The Supreme Court has issued notice to the State Government," the filing said.
"The Company intends to carry on business in the State of Andhra Pradesh in accordance with the aforesaid Order of the Hon'ble Supreme Court of India," it added.