Karnataka Governor Approves Ordinance Against Microfinance Harassment

Karnataka Governor Thaawarchand Gehlot has approved an ordinance aimed at curbing harassment by microfinance companies. The ordinance comes in response to reports of borrower mistreatment and includes penalties of up to ten years in jail and fines. The Governor had previously returned the ordinance with suggestions.

Karnataka Governor Thaawarchand Gehlot has given the green light to the Karnataka Micro Finance (Prevention of Coercive Actions) Ordinance 2025, aimed at ending harassment practices by microfinance companies.

The move comes after alarming reports of suicides and other severe consequences faced by borrowers due to aggressive recovery tactics used by agents. The ordinance includes strict penalties, including up to a ten-year jail term and fines of up to Rs five lakh.

The Governor had initially returned the ordinance with suggestions, which were addressed by the government before resubmitting it for approval. The bill is expected to be tabled in the next legislative session.