Bengaluru, Feb. 3 -- Karnataka to crack down on money-lenders charging exorbitant interest rates

In a decisive move to curb the harassment of borrowers by microfinance institutions and money-lenders, the Karnataka Government is set to enforce stricter regulations, including a 10-year prison term for charging exorbitant interest rates.

The Department of Co-operation is preparing amendments to existing laws to impose severe penalties on money-lenders, pawn-brokers, and unauthorised financial institutions exploiting borrowers.

Currently, the Karnataka Prohibition of Charging Excessive Interest Act, 2004, provides for a maximum sentence of three years, but the Government plans to increase it to 10 years, along with a fine exceeding Rs. 1 l...