Karnataka govt sends microfin ordinance back to Guv with explanations
Bengaluru, Feb 10 (PTI): The Karnataka government on Monday said it has re-sent the ordinance aimed at protecting borrowers from harassment by microfinance institutions (MFIs) to the Governor once again for his assent, along with the explanations he had sought.
Governor Thaawarchand Gehlot had recently returned the ordinance to the government, citing regulatory excesses.
The Karnataka Micro Finance (Prevention of Coercive Actions) Ordinance 2025 includes penal provisions such as a jail term of up to ten years and a fine of up to Rs 5 lakh for violations.
The government decided to promulgate the ordinance in response to a spate of suicides and multiple complaints from various parts of the state against predatory loan recovery methods adopted by microfinance firms.
"The ordinance on microfinance has been sent back to the Governor along with all the explanations sought by him," the Chief Minister's Office said.
The Governor, while returning the ordinance to the government, had noted the state government was proposing to discharge all pending loans, including interest, once the ordinance comes into effect, and that no civil court shall entertain any proceedings against borrowers.
"But if all pending loans with interest are discharged, lawful and genuine lenders may face difficulties. Furthermore, they will have no legal remedy to recover their dues," the Governor stated.
He emphasised that, as a principle of natural justice, every person has the right to seek legal remedies for their grievances.
"Preventing individuals from fighting for their rights may lead to a violation of fundamental rights guaranteed under Articles 19 and 32 of the Constitution of India," Gehlot added.
He also said this goes against the principles of lending followed by government banks.
Further, he noted that the proposed ordinance could negatively impact the state's business prospects by affecting self-help groups, which play a crucial role in uplifting the most vulnerable sections of society.
The ordinance aims to regulate only unregistered and unlicensed lending agencies, he said. However, he emphasized that some of these lenders, who are genuine individuals with a conscience, often serve as a lifeline for those overlooked by the traditional credit system.
"When managed responsibly, they expand access to credit and contribute to the robust growth of the financial sector," Gehlot said.
The Governor said that the punishment provisions—10 years of imprisonment and a Rs 5 lakh fine—are disproportionate compared to those in existing laws for similar offences.
He further noted that, given that the maximum loan amount that can be sanctioned is Rs 3 lakh, imposing a Rs 5 lakh fine goes against natural justice.
The Governor pointed out that to curb forceful and unlawful activities by unscrupulous lending agencies, the state government, through its police and relevant departments, already has legal provisions under the Karnataka Money Lenders Act, 1961, the Negotiable Instruments Act, 1881, the Karnataka Debt Relief Act, 1976, the Indian Penal Code, and the Karnataka Police Act to address such violations.
Gehlot said that effective enforcement of existing laws by the authorities would be a more efficient way to regulate the issue.
He also advised that, since the Budget Session is set to commence next month, instead of rushing through an ordinance, the state government should deliberate on the issue in detail and introduce a well-structured law in the interest of the affected people and to protect their rights.
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RCB beat MI by 18 runs after batters fire
Mumbai (PTI): Royal Challengers Bengaluru skipper Rajat Patidar, Phil Salt and Virat Kohli blasted half-centuries as the defending champions beat Mumbai Indians by 18 runs in an Indian Premier League match here on Sunday.
Salt (78 off 36 balls) and Kohli (50 off 38 balls) stitched together a 120-run stand for the opening wicket before Patidar scored a rapid 53 off just 20 balls as RCB posted 240 for 4.
In response, Mumbai Indians were restricted to 222 for 5, with RCB spinner Suyash Sharma (2/47) putting the skids on the home side with a double strike in the eighth over, from which they could not recover.
Sherfane Rutherford top-scored for MI with an unbeaten 71 off 31 balls.
While opener Rohit Sharma appeared to be struggling with a hamstring issue and had to retire hurt on 19, his partner Ryan Rickelton made 37, while Suryakumar Yadav (33) and Hardik Pandya (40) were the other contributors for MI.
Brief scores:
Royal Challengers Bengaluru 240 for 4 in 20 overs (Phil Salt 78, Virat Kohli 50, Rajat Patidar 53, Tim David 35 not out).
Mumbai Indians: 222 for 5 in 20 overs (Sherfane Rutherford 71 not out, Ryan Rickelton 37, Hardik Pandya 40; Suyash Sharma 2/47).
