SAHAKARA SINDHU
Department Of Cooperation, Government of Karnataka

Money Lenders / Pawn Brokers    ||    Chit Funds

 

KARNATAKA MONEY LENDERS AND PAWN BROKERS ACT

For more details contact :

H. Balashekar, JRCS (Legal Cell) ,
Contact No :080-22268436,
Email : jrcs-legal-ka@nic.in

M.P.Manjunath,
ARCS(Money Lending- squad
),
Contact No :080-22269636/37 Ext : 223,
Email : arcs-ml1-ka@nic.in

      The Karnataka Money Lenders Act 1961 and Karnataka Pawn Brokers Act 1961 came into effect from 29-3-1962 with a view to regulate the Money Lending and Pawn Broking Business in Karnataka State. The Karnataka Money Lenders Rules, 1965 have been framed and came into effect from 23-3-1965. Similarly Karnataka Pawn Brokers Rules 1966 come into effect from 19-7-1966.

      Any person who intends to conduct Money Lending and Pawn Broking business shall obtain license as per the Section 6 & 4 of the said Acts respectively, renewable every five years. He shall pay the license fee to Government to the extend of Rs.5000/- for M.L. and Rs.2500/- for P.B. for a period of five years.

  The licensee is required to remit the Security Deposit to the Government which are as follows depending upon the turnover he has made :-

  •  upto Rs. 1 lakh Rs.5,000/-

  •  from 1-5 lakhs Rs.10,000/-

  •  from 5-10 lakhs Rs.25,000/-

  •  above 10 lakhs Rs.50,000/-

      Charging Exorbitant Interest by the Money Lenders is prohibited. As per Government Notification dated 28-9-2003, they shall not charge more than 14% (for secured) and 16% (for unsecured loans).

Particulars of progress under Money Lenders and Pawn Brokers Act as at the end of 31-3-2017

(Rs.in lakhs)
Sl. No
In the State
2016-17
1 Number of Licensed Money Lenders
5380
2 Number of Licensed Pawn Brokers
8734
3 Number of Fresh Licenses Obtained(Money lenders)
508
4 Number of Fresh Licenses Obtained(Pawn Brokers)
368
5 Amount of Money lenders and pawn brokers Fees Submited to the Government
107.5
6 Deposit Collected from Money Lenders and pawn brokers
155.5
7 Deposits Refunded to Money Lenders and Pawn Brokers
30.12
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