“From 15% to 30%: How a Finance Company Is Pushing Schools Into Debt Slavery”
KRUPA Condemns Varthana/Thirumeni Finance’s “Predatory Tactics,” Seeks Urgent Action
Bengaluru: In a scathing indictment of alleged financial exploitation and intimidation, the Karnataka Recognized Unaided Private Schools Association (KRUPA) has accused Varthana/Thirumeni Finance Private Limited of subjecting private schools to harassment, fraud, and coercive recovery practices. The association has called for immediate government intervention, warning that the predatory actions of such non-banking financial companies (NBFCs) are pushing educational institutions into severe distress.
Schools Trapped in Debt Spiral, Face Extortionist Interest Rates
At a press conference held on [date], KRUPA President Lokesh Talekatte revealed that thousands of private schools across Karnataka had taken loans from firms like Varthana, Thirumeni, and “You Grow” for infrastructure development. Initially lured by “reasonable” interest rates of 15%, many schools later found themselves trapped in a vicious cycle of escalating payments, with some forced to cough up an exorbitant 30% interest due to minor delays.
“This is nothing short of financial entrapment,” Talekatte fumed. “Schools that trusted these institutions are now being bled dry.”
Strong-Arm Tactics: Threats, Intimidation, and Public Humiliation
The allegations take a darker turn with claims of strong-arm recovery methods. According to KRUPA, finance company officials—often accompanied by hired muscle—have been barging into school premises, verbally abusing staff, and confiscating student fee collections at gunpoint.
In some cases, school gates were padlocked to force payments, while management members’ personal assets were illegally seized under dubious loan agreements. Shockingly, even schools that fully repaid their loans were allegedly targeted again with fabricated documents to extort additional payments.
“This is not just unethical—it is criminal,” Talekatte asserted. “How can education thrive when schools are treated like ATMs for loan sharks?”
KRUPA’s Appeal: Govt Must Act Before More Schools Shut Down
With distress mounting, KRUPA has submitted a memorandum to Chief Minister Siddaramaiah, demanding:
- An immediate probe into the alleged malpractices of Varthana/Thirumeni Finance.
- Legal action against coercive recovery tactics.
- Regulatory safeguards to prevent NBFCs from exploiting educational institutions.
“Education is a fundamental right, not a profit-churning business for financiers,” Talekatte declared. “The government must step in before more schools are driven to ruin.”
Will Karnataka Govt Respond?
As the outcry grows, the ball now lies in the state government’s court. Will authorities rein in these alleged financial predators, or will private schools continue to suffer in silence? For now, KRUPA’s message is clear: Enough is enough.
Key Statements RBI
From KRUPA (Karnataka Recognized Unaided Private Schools Association)
- Lokesh Talikatte, President, KRUPA:
- “What started as loans for school development has turned into a nightmare. Varthana/Thirumeni Finance is sucking the lifeblood out of education with extortionist interest rates and brute-force recovery tactics.”
- “We demand the Karnataka government act immediately—before more schools are forced to shut down due to financial terror.”
- “‘Pay or We’ll Seize Your Land,’ this is what the Karnataka Schools are facing the Financial Goondagiri,” Lokesh Talikatte
- Anonymous School Principal (Bangalore Rural District):
- “They locked our gates, took fee money at gunpoint, and humiliated us in front of parents. Is this how we treat educators?”
From Legal & Financial Experts
- Advocate Ramesh N. (Education Rights Activist):
- “If proven, these actions violate the SARFAESI Act and RBI guidelines on fair recovery. Schools must document evidence and file police complaints.”
- Financial Analyst, Prakash Shetty:
- “NBFCs exploiting small institutions is a state-wide crisis. The government must cap interest rates for education loans.”
Q & A: Key Concerns Addressed
Q: Why are private schools turning to NBFCs like Varthana?
A: Most lack access to traditional bank loans due to strict collateral requirements. NBFCs offer quicker approvals but trap schools in high-interest debt cycles.
Q: What legal protections do schools have?
A: The RBI mandates fair recovery practices—no intimidation, asset seizure without court orders, or fabricated documents. Schools can file complaints with the State Education Department + RBI Ombudsman.
Q: What’s the government’s stance?
A: No official response yet, but KRUPA’s memorandum pressures CM Siddaramaiah to intervene. Past cases (e.g., Microfinance harassment in Kerala) led to state-backed debt relief.
Context & Background
- 2015–2023: Private schools in Karnataka borrowed heavily from NBFCs for digital classrooms, RTE compliance, and infrastructure.
- 2021: RBI warned NBFCs against “unfair practices” but enforcement remains weak.
- 2024: Multiple schools in Tumkur, Hassan, and Bengaluru Rural reported forced closures due to loan harassment.
#SaveKarnatakaSchools #StopEduLoanHarassment #VarthanaExposed #EducationNotExploitation #SiddaramaiahActNow
