Vidhi Codex

The Karnataka Money-lenders Act, 1961

The Karnataka Money-lenders Act, 1961

Finance196148 sections

This Act regulates the business of money-lending in the state of Karnataka by establishing a licensing system for lenders. It applies to individuals and entities engaged in advancing loans at interest, excluding banks, co-operative societies, and government bodies. The legislation matters because it sets clear rules regarding interest rates, capital investment, and the terms of loans to protect borrowers from exploitation. By requiring licenses and defining what constitutes a valid loan, the Act ensures transparency and accountability in the financial dealings of private lenders, promoting fair and safe credit practices for the general public.

Start reading →Read full ActSections
  1. 0. Preamble
  2. 1. Short title, extent and commencement
  3. 2. Definitions
  4. 3. Appointment of Registrar General, Registrars and Assistant Registrars
  5. 4. Register of money-lenders
  6. 5. Money-lenders to obtain licence
  7. 6. Application for licence
  8. 7. Grant of licence and entry in register
  9. 7A. Conditions of licence
  10. 7B. Forfeiture of security
  11. 8. Refusal of issue of licence
  12. 9. Registrar’s power to cancel licences
  13. 9A. Repayment of Security Deposit
  14. 10. Term of licence
  15. 13. Application for cancellation of licence
  16. 14. Registrar and Assistant Registrar to have powers of Civil Court
  17. 15. Power of authorised officer to require production of records or documents and power of entry, inspection and seizure
  18. 16. Court’s power to cancel or suspend a licence
  19. 17. No compensation for suspension or cancellation of licence
  20. 18. Persons debarred from doing business during period of suspension or cancellation of licence
  21. 19. Person whose licence is suspended or cancelled not to apply without giving particulars of endorsement or of disqualification
  22. 20. Duty of money-lender to keep accounts and furnish copies
  23. 21. Delivery of statement of accounts and copies thereof by money-lender
  24. 22. Fees for certain statements supplied to debtors and Assistant Registrars
  25. 23. Debtors not bound to admit correctness of accounts
  26. 24. Procedure of court in suits regarding loans
  27. 25. Provisions of certain sections not to apply to loans made by company or unincorporated body exempted by Government
  28. 26. Power of Court to limit interest recoverable in certain cases
  29. 27. Power of Court to direct payment of decretal amount by instalments
  30. 28. Limitation on rates of interest
  31. 29. Prohibition of charge for expenses on loans by money-lenders
  32. 30. Notice and information to be given on assignment of loan
  33. 31. Application of Act as respects assignees
  34. 32. Reopening of transactions
  35. 33. Inquiry for taking accounts and declaring the amount due
  36. 34. Deposit in Court of money due to money-lender
  37. 35. When interest to be paid for entire month
  38. 36. Money-lenders to exhibit their names over shops
  39. 37. Entry of wrong sum in bond, etc., to be an offence
  40. 38. Penalty for molestation
  41. 38A. Prohibition of using coercive action
  42. 39. General provision regarding penalties
  43. 40. Offences by Hindu Joint Family, Corporation, etc.
  44. 41. Certain offences to be cognizable
  45. 42. Every officer to be public servant
  46. 43. Saving of laws relating to agriculturists’ indebtedness
  47. 44. Rules
  48. 45. Repeal and savings

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