KARNATAKA MONEY LENDERS AND PAWN BROKERS ACT
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 :-
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