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It's about slavery.

In older times, the iron ring was worn only by slaves. It showed everyone that that person was a slave and that he had a master. No one wanted to wear the iron ring voluntarily. It was forced on the slave by the master to show that person was his property.

Wearing the iron bracelet voluntarily has the deepest of meanings. It means that you declare yourself a slave! You declare yourself as Guru Ji's banda. It reminds you that you have only one master - Guru Ji. Every time you see your own kara it reminds you that your life is lived in HIS service, and only his service. That you are the slave, not the master.

kara = banda