BENGALURU: Two days after the state government resubmitted the Karnataka Micro Finance (Prevention of Coercive Actions) Ordinance 2025, Governor Thaawarchand Gehlot approved it on Wednesday. Chief Minister Siddaramaiah posted on X that the Ordinance will come into effect immediately.
The governor had advised the government to introduce the Bill in the coming budget session and pass it after a thorough discussion. Under the Ordinance, violators can be tried and punished by the Judicial Magistrate First Class.
They may be sentenced up to 10 years’ imprisonment and ordered to pay a fine up to Rs 5 lakh. The offences under the Ordinance are cognisable and non-bailable.
Ordinance will protect farmers
A complaint can be filed against an errant microfinance company with the jurisdictional police. “No police officer shall refuse to register a case,’’ the Ordinance stated. It said no civil court shall entertain any suit or proceedings against the borrower for recovery of loan.
The Ordinance ensures protection to economically vulnerable groups and individuals, especially farmers, women and women’s self help groups, from errant microfinance institutions or money lending agencies.
Within 30 days from the date of commencement of this Ordinance, the microfinance institutions should apply for registration before the registering authority.