The Assembly approved the new law during the budget session. The government wants to control rising complaints against microfinance firms and private lenders who pressure poor families for repayment.

Under the law, all microfinance companies must register with the Bihar government within 90 days. Even firms that hold RBI approval must seek state permission before offering loans. Authorities will treat unregistered lending as a criminal offence.

The bill also proposes special courts in every district. These courts will handle cases linked to loan harassment and financial distress. Officials say the law will ensure fair interest rates and protect vulnerable borrowers across the state.

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