<h1>Karnataka Bill Passed to Prevent Coercive Microloan Recoveries, Imposes Jail and Fines for Violations</h1> The Karnataka Legislative Assembly passed the Karnataka Micro Loan and Small Loan (Prevention of Coercive Actions) Bill, 2025, to safeguard borrowers from harassment by microfinance institutions. The Bill, which replaces an earlier ordinance, includes penalties such as up to ten years in jail and fines up to Rs five lakh for violations. It mandates registration of lending agencies and prohibits coercive recovery methods. An ombudsman will mediate disputes, and police can file cases against violators. The Bill aims to protect vulnerable sections like farmers and vendors. Additional related bills were also passed to enhance borrower protection.