Karnataka directs banks to stop offsetting Gruha Lakshmi against loan dues

The Karnataka government has issued directions to the State Level Bankers' Committee (SLBC) prohibiting banks from adjusting amounts disbursed under the Gruha Lakshmi scheme against pending loan liabilities of beneficiaries.

The government's instruction follows concerns that financial institutions have been deducting welfare payments without securing clear written authorization from the scheme's beneficiaries. State officials have directed that all such adjustments made without proper consent documentation be immediately reversed.

Under Gruha Lakshmi, the state government provides financial assistance directly to eligible women beneficiaries. The scheme aims to provide targeted support, and the government has emphasized that these allocated funds should reach beneficiaries in full, separate from any banking relationships or loan obligations they may hold.

The SLBC, which coordinates between banks and state authorities on policy implementation, has been tasked with ensuring compliance across all participating financial institutions. Banks have been directed to credit back any previously adjusted amounts to the respective beneficiary accounts without delay.

This directive underscores the government's commitment to protecting the intended benefits of welfare schemes and preventing unauthorized deductions from reaching vulnerable populations.