Tamil Nadu has passed a strict new law, to shield borrowers from harsh recovery tactics by finance and microfinance firms. It allows jail for 3 to 5 years and a fine for harassment during loan recovery.
The Kerala High Court ruled against the practice of publicly displaying defaulting borrowers’ photographs and details for loan recovery, citing violations of dignity and privacy under the Kerala Co-operative Societies Act. The court emphasized lawful alternatives for debt recovery exist, reinforcing borrowers’ rights under Article 21 of the Constitution of India.
