The Karnataka Prohibition of Charging Exorbitant Interest Act, 2004
The Karnataka Prohibition of Charging Exorbitant Interest Act, 2004
The Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, regulates lending by outlawing interest rates that exceed official limits. Applying to all money lenders and debtors within the state of Karnataka, this law matters because it protects citizens from predatory financial exploitation. It strictly bans coercive recovery tactics, including physical threats, harassment, and violence, and punishes violators with heavy fines and up to ten years of imprisonment. Borrowers can seek court intervention to adjust unfair interest rates or recover forcibly seized property. Crucially, the act holds illegal lenders criminally responsible if their harassment drives a struggling debtor to commit suicide.
- 1. Short title, extent and commencement
- 2. Definitions
- 3. Prohibition of charging exorbitant interest and using coercive action
- 4. Penalty
- 4A. Power to cancel or suspend Registration
- 4B. Lending Norms
- 5. Deposit of money and presentation of petition to court and the procedure thereof
- 6. Restoration of possession of property
- 7. Voluntary disclosure
- 8. Adjustment of Interest
- 9. Abetment of suicide
- 10. Court fees
- 11. Act not to be in derogation to other laws
- 12. Application of provisions of the Karnataka Money Lenders Act, 1961
- 13. Deferment of repayment of loan
- 14. Repeal and Savings
- 0. Preamble
PDF: pending for this language.