Bihar Assembly Passes Bill To Regulate Microfinance Cos; State-Level Registration Made Mandatory

The Bihar Assembly has enacted the Bihar Micro Finance Institutions (Regulation of Money Lending and Prevention of Coercive Actions) Bill, 2026, aimed at establishing a regulatory framework for microfinance companies operating within the state. This legislation mandates that all lenders must secure prior approval from the state Finance Department before issuing any loans. The bill addresses concerns over the coercive practices often associated with micro-lending, ensuring better protection for borrowers. By requiring state-level registration, the government aims to enhance transparency and accountability in the microfinance sector, which has been under scrutiny for its impact on vulnerable populations. This move aligns with broader efforts to regulate financial services in India and safeguard consumer interests, particularly in a state where many rely on microfinance for their economic needs. The legislation reflects Bihar's commitment to fostering a fair lending environment while curbing malpractices that have plagued the sector in the past.