The bill seeks to introduce a minimum notice period of 180 days and conduct the auction through a licensed auctioneer approved by the state government.
The Legislative Council on Friday allowed a private member bill to curb harassment of those who pledge gold by non-banking financial companies and private financial institutions in the state. Congress member Ramesh Babu moved the Karnataka Bill to protect borrowers who have pledged gold, which the House agreed to take up next week.
Moving the bill, Mr. Babu said borrowers pledging gold in case of emergency must be protected as companies were auctioning gold after default and making huge profits. “Borrowers get about 50% of the value of the gold on the day it is stopped. Later the value of the gold increases and during the auction the companies realize a higher amount which is not shared with the borrowers. There is a need to regulate gold loan companies to protect the borrowers.”
Currently, he pointed out that no auction notice is given to the borrower and that the bill seeks to introduce a minimum notice period of 180 days and the auction to be conducted through a licensed auctioneer approved by the state government in the presence of a government official. “The surplus remaining after deducting the amount owed should be returned to the borrowers within 15 days.”
Published – 13 March 2026 20:30 IST
