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.
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.
The draft Ordinance prevents MFIs from use of coercive action either by themselves or by their agents for recovery of money from borrowers. It has banned them from exerting pressure, using violence, insulting or intimidating the borrower or their family members. It has banned using the service of private or external agencies, or people with criminal backgrounds to negotiate or coerce the borrower.
The draft of the Ordinance has already been sent to Karnataka Governor for his assent.
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. If the law is not strong, these incidents will not stop. This is intended to act as a deterrent.” Earlier, a three-year imprisonment and fine of ₹5 lakh was proposed for offences committed under the law.
Replying to a question about the steps taken by the government considering the prospect of MFIs approaching the court, Dr. Parameshwara said that there had been some delay for this very reason.
“When we prepared the first draft, we discussed that MFIs may approach the court. After several rounds of meetings, the Chief Minister had directed the Law Department to take precautions, which is why the preparation of the draft got delayed. The new draft has considered all these suggestions,” he said.
The draft of the Karnataka Microfinance (Prevention of Coercive Actions) Ordinance, 2025, has proposed to provide relief to borrowers from coercive action by unlicensed and unregistered MFIs or money lending agencies/organisations.
Srinivas University's 7th convocation saw 2,233 students graduate, with inspiring speeches and awards highlighting the ceremony.
Dalai Lama and BJP leader Sambit Patra receive Z-category security cover from CRPF in India.
Senior scientist emphasizes water conservation and sustainable resource management for future generations at international conference on environmental sustainability.
Chairperson G. Pallavi visits nomadic communities in Kodagu, urging them to benefit from government schemes for economic stability.
Minister C.V. Ganesan inaugurates phase III of Makkaludan Mudhalvar scheme in Krishnagiri
Yuvraj ahead of Jamal by a stroke
Arrest of Vamsi illegal, says YSRCP leader Botcha Satyanarayana. The NDA government in Andhra Pradesh has been resorting to vendetta politics since coming to power, and has failed to implement its electoral promises, he says.
UDF hartal in Wayanad over wild animal attacks disrupts daily life, affecting businesses, transportation, and educational institutions.
Kalaburagi CPI(M) demands Karnataka government enforce Micro Loan Ordinance, curb microfinance harassment, and support self-help groups.
CITU representatives seek action against contract worker employment at Samsung and S.H. Electronics India factories in Sriperumbudur.
Kalyana Karnataka Literary Festival at Gulbarga University features seminars, renowned writers, and interactive sessions on literature.
Beyond a rise in operational expenses, BMRCL is grappling with substantial loan repayment commitments, officials said.
A significant ruling by the Delhi High Court – former Congress MP Sajjan Kumar has been convicted in a dual murder case related to the 1984 anti-Sikh riots.