Bengaluru: The Karnataka Micro Loan and Small Loan (Prevention of Coercive Actions) Ordinance, 2025 that awards 10-year rigorous jail imprisonment, imposition of Rs. 5  lakh fine, action against black money and immunity against the harassment of money lenders, was passed in the Legislative Assembly yesterday.

Law Minister H.K. Patil tabled the Ordinance on behalf of Chief Minister Siddaramaiah in the Assembly, that saw intense debate by the Ruling and Opposition parties MLAs, before it was eventually passed, albeit with the advise of the Opposition parties.

Minister Patil, who proposed the Ordinance on behalf of the CM, told the Assembly that the Ordinance has been introduced to prevent harassment by the private financial institutions and micro finance firms, and protect those who have availed loan.

The poor and the underprivileged, especially in the rural areas and the urban labourers and socially weaker sections have been bearing the brunt of such financial firms. The fiancé firms are forcing the borrowers to pay exorbitant rate of interest for the loan, pushing borrowers to the streets. Some of them are resorting to end their lives, unable to bear the harassment of the finance firms. The aim is to rein in such unregulated financial activities and to add more teeth to the Police to invoke legal action to protect the borrowers, explained Minister Patil.

Sharing relevant points, Opposition Leader in the Legislative Assembly R. Ashok said, the law that existed was suffice to rein in such finance racket. However, due to the failure of the Government to take stringent action, the hapless and poor borrowers had to lose their lives. It is estimated that, about 30 people have already lost their lives to the harassment of finance firms.

“The Government is set to introduce the law and we don’t have any qualms, but the current dispensation should ensure that, it won’t fail in the Court of justice. The Government should also take into cognisance, those legally eligible for loan,” said Opposition Leader Ashok.