Section 8 of KARNATAKA ACT NO. 15 OF 2025

(MFI).- Micro Finance Institution (MFI) or Money Lending Agencies or

Organization or Lender shall not use any coercive action either by itself or by its agents for recovery of money from the borrower and any form of coercive recovery shall be liable for punishment under the provisions of this Act and empower the Registering Authority to suspend or cancel the Registration of such Micro Finance Institution (MFI) or Money Lending

Agencies or Organization or Lender as provided under the provisions of this

Act.

Explanation: For the purposes of this section, "coercive Action" by a Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender against the borrowers include the following, namely:-

1. (i)exerting pressure or obstructing or using violence to or insulting or intimidating the borrower or his/her family members, or
2. (ii)persistently following the borrower, his/her family member from place to place or interfering with any property owned or used by him/her or depriving him/her of, or hindering him/her in the use of any such property, or
3. (iii)frequenting the house or other place where the borrower resides or works, or carries on business, or happens to be, with an intension of taking coercive action, or
4. (iv)using the service of private or outsource or external agencies, criminal background to negotiate/urging the borrower to make payment using coercive and undue influence, or
5. (v)Seeking to take forcibly any document from the borrower which entitles the borrower to a benefit under any Government programme.