Karnataka: 32 people died by suicide due to harassment by microfinance firms, says home minister

Karnataka’s home minister G Parameshwara

Thirty-two people have died by suicide since 2023 due to harassment by microfinance firms, Karnataka’s home minister G Parameshwara has told the assembly.

The number of suicides linked to harassment by microfinance companies has been rising in the state — eight cases in 2023, seven in 2024 and 17 in 2025, the minister said in response to a query by Malleshwaram MLA CN Ashwath Narayan on March 18.

The state government was forced to promulgate the Karnataka Micro Loan and Small Loan (Prevention of Coercive Action) Ordinance, 2025, to curb malpractices in the sector and regulate microfinance companies, Parameshwara said. The ordinance was issued on February 12.

"Cases are being registered under the new Act. If the public faces harassment from microfinance companies, they should approach the concerned police station immediately. Adequate awareness is being created to encourage complaints without fear," said Parameshwara.

Of the 32 cases, the highest of eight cases were reported in Tumakuru district and two each in Ramanagara, Mysuru, Haveri, and Shivamogga. Bengaluru recorded one case in 2025 involving a 43-year-old resident of Yelahanka.

Statistics show that the number of cases registered against microfinance institutions increased sharply — from six in 2023 to 22 in 2024 and 90 in 2025. Arrests also rose, with 10 in 2023, 59 in 2024, and 231 in 2025.

Also, read: Karnataka: Microfinance ordinance gets governor’s nod; violators face up to 10 years in jail, Rs 5 lakh fine

Parameshwara said regular public grievance meetings would be held to identify and act against harassment by microfinance firms. "If complaints are received, legal action will be taken as per the rules," he said.

To ensure compliance with RBI guidelines, the government plans to conduct meetings with microfinance companies.

"Before disbursing microfinance loans, lenders must verify whether applicants already have loans from multiple sources. If institutions fail to follow proper procedures and cause hardship to the public, appropriate action will be taken against them," he said.

Also read: Karnataka's bucket of woes: A listless Congress, divided BJP, citizens burdened by poor infra and price hikes

The minister also stressed that microfinance institutions must be registered with the relevant authority, and loans cannot be sanctioned without proper registration. "Lending licences of institutions involved in illegal activities will be cancelled," he warned.