Bengaluru, Feb. 14 -- The Karnataka chief minister's office (CMO) on Thursday released the fine print of the Karnataka Micro Loan and Small Loan (Prohibition of Coercive Measures) Ordinance, 2025, which came into effect on February 12. The ordinance seeks to "regulate the burden imposed on borrowers due to high-interest rates" and curb "coercive recovery practices" by microfinance institutions (MFIs) and unregulated moneylenders.

Karnataka Governor Thaawarchand Gehlot on Wednesday gave his approval to the ordinance, after receiving clarifications from the state government.

According to the ordinance, "microfinance institutions shall not collect any security from borrowers," a move aimed at preventing the exploitation of vulnerable group...