Siddaramaiah instructs DCs, SPs to take steps to close all illegal MFIs
1 month, 2 weeks ago

Siddaramaiah instructs DCs, SPs to take steps to close all illegal MFIs

The Hindu  

Karnataka Chief Minister Siddaramaiah on Saturday instructed Deputy Commissioners and Superintendents of Police of all districts to take steps to shut down all illegal and unregistered microfinance institutions that are exploiting the poor by charging exorbitant rates of interest on loans. The Chief Minister held a videoconference with DCs and SPs and sternly told them to take steps to implement the Ordinance promulgated by the government in this regard and put a break on hiring rowdies and agents for recovery of loans by illegal MFIs in the State. The Karnataka Micro Loan and Small Loan Ordinance, 2025, aims at cracking the whip on unregistered and unlicensed MFIs that employ coercive means to recover loans given to poor people. Mr. Siddaramaiah told officials to take steps towards regulating the actions of unregulated/unregistered MFIs and moneylending agencies or organisations, thereby, protecting and relieving economically vulnerable groups and individuals from the undue hardship of usurious interest rates and coercive means of recovery.

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History of this topic

How Karnataka’s new Ordinance proposes to crack down on microfinance institutions
1 month, 2 weeks ago

How Karnataka’s new Ordinance proposes to crack down on microfinance institutions

The Hindu  

The story so far On February 12, 2025, after days of deliberations, the State government promulgated the Karnataka Micro Loan and Small Loan Ordinance, 2025, which aims to crack down on unregistered and unlicensed microfinance institutions and moneylending agencies or organisations that employ forceful means to recover loans given to poor people. The new legislation seeks to regulate the actions …

Karnataka MFI ordinance isn’t that bad. But the industry is still worried
1 month, 2 weeks ago

Karnataka MFI ordinance isn’t that bad. But the industry is still worried

Live Mint  

Mumbai: The new ordinance notified by the Karnataka government to regulate microfinance loan recoveries may have come as a relief to non-bank microfinance companies regulated by the Reserve Bank of India, but experts warn that collections could get impacted in the next two quarters. While the preamble of the ordinance clarifies that regulated MFI lenders will be excluded, the entire …

Karnataka Governor Thaawarchand Gehlot gives nod to Ordinance on MFIs, makes a few suggestions
1 month, 2 weeks ago

Karnataka Governor Thaawarchand Gehlot gives nod to Ordinance on MFIs, makes a few suggestions

The Hindu  

Governor Thaawarchand Gehlot has finally approved The Karnataka Micro Loan and Small Loan Ordinance, 2025, with a few suggestions on what needs to be incorporated at the time of its execution. ‘A good step’ While giving his assent, the Governor observed, “The Ordinance is a good step towards regulating the actions of unregulated/unregistered MFIs and moneylending agencies or organisations, and …

Law to curb Microfinance harassment to come into effect soon: Karnataka CM Siddaramaiah
1 month, 2 weeks ago

Law to curb Microfinance harassment to come into effect soon: Karnataka CM Siddaramaiah

Hindustan Times  

Karnataka Chief Minister Siddaramaiah announced on Wednesday that the state government will soon enforce an ordinance to curb harassment by microfinance companies. Karnataka Chief Minister Siddaramaiah In his X post, CM wrote, "An ordinance designed to prevent harassment of borrowers by microfinance companies under the pretext of debt collection has received the Governor's signature. The chief minister's office said on …

Siddaramaiah-led Karnataka government sends microfinance ordinance back to Governor with explanations
1 month, 3 weeks ago

Siddaramaiah-led Karnataka government sends microfinance ordinance back to Governor with explanations

Hindustan Times  

The Karnataka government on Monday said it has re-sent the ordinance aimed at protecting borrowers from harassment by microfinance institutions to the Governor once again for his assent, along with the explanations he had sought. Karnataka Chief Minister Siddaramaiah Governor Thaawarchand Gehlot had recently returned the ordinance to the government, citing regulatory excesses. "The ordinance on microfinance has been sent …

Karnataka government resends MFI Ordinance to Governor without change, but with detailed explanation on his objections
1 month, 3 weeks ago

Karnataka government resends MFI Ordinance to Governor without change, but with detailed explanation on his objections

The Hindu  

The Karnataka government has resent the Karnataka Micro Loan and Small Loan Ordinance, 2025, to Governor Thaawarchand Gehlot without any changes. The Governor had said: “If all the pending loans with interest as on date is discharged, the lawful and genuine lenders may face trouble.” Referring to this, the government clarified that none of the unlicensed firms or persons had …

MFI Ordinance will be sent back to Governor with clarifications, says Karnataka Home Minister
1 month, 3 weeks ago

MFI Ordinance will be sent back to Governor with clarifications, says Karnataka Home Minister

The Hindu  

Home Minister G. Parameshwara said on Saturday that the government would address the issues flagged by Governor Thaawarchand Gehlot regarding Karnataka Micro Finance Ordinance, 2025, and send it back to him for assent. Following cases reported from across Karnataka of Microfinance Institutions allegedly harassing defaulters, the Karnataka government had drafted the Ordinance with some stringent norms and sent it to …

Karnataka Governor Rejects Microfinance Ordinance, Cites Injustice To Lenders
1 month, 3 weeks ago

Karnataka Governor Rejects Microfinance Ordinance, Cites Injustice To Lenders

ABP News  

Governor Thaawarchand Gehlot on Friday rejected Karnataka Micro Finance Ordinance 2025, stating that in its current form, the lenders, who are also part of the society, are being done a great injustice. Aimed at protecting borrowers from harassment by microfinance institutions, the Karnataka government drafted the ordinance with penal provisions, including a jail term up to 10 years, and fine …

Karnataka ministers respond to Governor's remark on microfinance ordinance
1 month, 3 weeks ago

Karnataka ministers respond to Governor's remark on microfinance ordinance

India Today  

Karnataka Home Minister G Parameshwara announced that the state government would address the Governor Thaawarchand Gehlot’s concerns and resubmit the Karnataka Micro Finance Ordinance 2025 for assent. The ordinance, aimed at protecting borrowers from harassment by microfinance institutions, was returned by the Governor, who cited regulatory excesses and disproportionate punishments such as a 10-year imprisonment and a Rs 5 lakh …

Karnataka: Governor returns microfinance Ordinance, says existing laws can be used to curb harassment
1 month, 3 weeks ago

Karnataka: Governor returns microfinance Ordinance, says existing laws can be used to curb harassment

The Hindu  

Flagging problem areas in the Karnataka Micro Loan and Small Loan Ordinance, 2025, Governor Thaawarchand Gehlot on Friday returned it to the State government suggesting that the Ordinance will benefit only borrowers and no provisions have been made to provide protection to lenders. Moreover, the Governor suggested to the government to enforce the existing laws effectively to prevent harassment of …

Siddaramaiah govt’s microfinance ordinance rejected by Governor over harsh penalties
1 month, 3 weeks ago

Siddaramaiah govt’s microfinance ordinance rejected by Governor over harsh penalties

Hindustan Times  

Governor Thaawarchand Gehlot on Friday rejected the Karnataka Micro Finance Ordinance 2025, which was proposed by the Siddaramaiah-led Congress government to regulate microfinance practices. Gehlot felt that the punishment of 10 years and fine of ₹5 lakh proposed by the Karnataka government is excessive, said the CMO according to news agency PTI. Aimed at protecting borrowers from harassment by microfinance …

Governor returns Karnataka microfinance ordinance
1 month, 3 weeks ago

Governor returns Karnataka microfinance ordinance

The Hindu  

Governor Thaawarchand Gehlot returned to the State Government the Karnataka Micro Loan and Small Loan Ordinance, 2025, suggesting that the ordinance will benefit borrowers while no provision has been made to provide protection to lenders. The Governor advised the State Government to deliberate on the issue in detail and bring an effective enactment in the interest of the affected people …

Maximum punishment for defaulting MFIs increased to 10 years, says Home Minister
1 month, 4 weeks ago

Maximum punishment for defaulting MFIs increased to 10 years, says Home Minister

The Hindu  

Home Minister G. Parameshwara on Tuesday said that the maximum imprisonment for erring microfinance institutions had been increased from three to 10 years in the final draft of the Ordinance. Speaking to reporters, Dr. Parameshwara said, “The government has increased the prison term from three to 10 years and mandated a fine amount of ₹10 lakh. Relief proposed The draft …

Karnataka Deputy CM says police will be given more power in Ordinance to rein in microfinance companies
1 month, 4 weeks ago

Karnataka Deputy CM says police will be given more power in Ordinance to rein in microfinance companies

The Hindu  

Deputy Chief Minister D.K. Shivakumar on Monday said that the State government will give more powers to the police to curb the torture of the poor by microfinance companies in the name of loan recovery. Speaking to reporters on Monday, Mr. Shivakumar said: ”Our government will not allow microfinance companies to take the law into their hands and torture the …

Law to curb harassment by microfinance firms soon: CM
Trending News
2 months ago

Law to curb harassment by microfinance firms soon: CM

Hindustan Times  

The state government will soon introduce a stringent law to curb harassment by microfinance institutions, chief minister Siddaramaiah said on Thursday. The state government will soon introduce a stringent law to curb harassment by microfinance institutions, chief minister Siddaramaiah said on Thursday Chairing a high-level meeting in Krishna, official residence of the chief minister, to address public grievances against microfinance …

Karnataka: DCs instructed to file criminal cases against microfinance firms if they adopt dubious methods to recover loans
2 months ago

Karnataka: DCs instructed to file criminal cases against microfinance firms if they adopt dubious methods to recover loans

The Hindu  

With reports from across districts of microfinance company representatives adopting dubious means to recover loans from poor defaulters, Revenue Minister Krishna Byre Gowda instructed Deputy Commissioners of districts to file criminal cases against companies if they violate RBI norms in the process of loan recovery. At a meeting of the Deputy Commissioners held in Bengaluru, Mr. Byre Gowda directed Deputy …

State government will act against microfinance institutions harassing public: K.N. Rajanna
2 months ago

State government will act against microfinance institutions harassing public: K.N. Rajanna

The Hindu  

Minister for Cooperation K.N. Rajanna said that the State government is prepared to take action against the microfinance institutions that are accused of harassing people after extending loan facilities. Speaking to presspersons in Hassan on Sunday, Mr. Rajanna said that there were many complaints related to harassing people in the name of recovering loans from self-help groups. Replying to a …

Helpline in districts to assist victims of harassment by micro finance companies
2 months ago

Helpline in districts to assist victims of harassment by micro finance companies

The Hindu  

Chief Minister Siddaramaiah on Sunday said that a helpline would be opened in the office of deputy commissioners in the district to help those in distress due to harassment by the micro finance companies, and this helpline would receive complaints from victims. Speaking to media here, he said that action would be initiated against micro finance companies if complaints are …

Karnataka govt. to promulgate ordinance to crack down on MFIs using coercive methods to recover loans
2 months, 1 week ago

Karnataka govt. to promulgate ordinance to crack down on MFIs using coercive methods to recover loans

The Hindu  

As microfinance institutions have allegedly been adopting coercive tactics for recovery of loans, which has caused financial distress in several districts of Karnataka, Chief Minister Siddaramaiah on Saturday announced that the government will promulgate an ordinance to crack down on erring financial firms. After public anger against forcible methods of recovery of loans by MFIs, Mr. Siddaramaiah, who also holds …

‘Will amend law to rein in microfinance companies’: Karnataka CM Siddaramaiah
2 months, 1 week ago

‘Will amend law to rein in microfinance companies’: Karnataka CM Siddaramaiah

Hindustan Times  

Karnataka Chief Minister Siddaramaiah on Saturday said the state government would amend the existing laws related to money lending business and introduce new legislation to protect the interest of the genuine borrowers. In the wake public outrage against the alleged harassment by micro-finance companies to recover money from borrowers, Siddaramaiah chaired an emergency meeting with his deputy DK Shivakumar, Revenue …

CM Siddaramaiah govt on mat as unauthorised microfin firms run free in Karnataka
2 months, 1 week ago

CM Siddaramaiah govt on mat as unauthorised microfin firms run free in Karnataka

New Indian Express  

MYSURU: Chikkadevamma cooks for her husband and son, takes a tiffin carrier for herself and reaches a nearby estate for work. She is not alone as villagers are bombarded with offers for loans from representatives from over half-a-dozen microfinance companies that offer loans within an hour. But these easy loan schemes soon turn into deep debt traps as these companies …

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