Any person who intends to conduct Money Lending and Pawn Broking business shall obtain license as per the Section 6 & 4 of KARNATAKA MONEY LENDERS AND PAWN BROKERS ACT respectively, renewable every five years. He shall pay the license fee to Government to the extend of Rs.5000/- for M.L. and Rs.2500/- for P.B. for a period of five years.
The licensee is required to remit the Security Deposit to the Government which are as follows depending upon the turnover he has made :-
upto Rs. 1 lakh Rs.5,000/-
from 1-5 lakhs Rs.10,000/-
from 5-10 lakhs Rs.25,000/-
above 10 lakhs Rs.50,000/-
Charging Exorbitant Interest by the Money Lenders is prohibited. As per Government Notification dated 28-9-2003, they shall not charge more than 14% (for secured) and 16% (for unsecured loans).
How you conduct the business is your own strategy and idea, there is no legal binding on it if you have obtained licence.