SKS Microfinance Ltd., the largest microfinance institution in India has asked for legal clarifications as to why and how the restriction imposed by the government in AP applies to it. The company said about its actions in an exchange filing.

The state of AP has come out with a slew of new restrictions on the microfinance industry in a reactive action after many of the borrowers went ahead with suicides. They did so because of the harsh recovery measures taken by these institutes and also high rate of interest that is being charged from them.

SKS has its headquarter based in Hyderabad and is unhappy with the kind of restrictions that have been imposed in it.

The situation of microfinance is becoming very poor across the state of AP and southern India in general. It has become so bad that some of the analysts are also calling it a crisis.

And since the competition has increased manifolds, some of the lenders are also going in for unqualified borrowers.

Meanwhile, in its statement SKS has also said that microfinance industry association, the Microfinance Institutions Network, is planning to go ahead and take a stay order on the issue.