Maharashtra tables 'stern' Money Lending bill in assembly

The bill with stringent anti-harassment provisions intends to regulate transactions of money lending

Once bitten twice shy. After spate of farmers suicides especially in the under developed Vidarbha region largely due to the harassment by money lenders, the state government today tabled Maharashtra Money Lending (Regulation) bill, 2014 to regulate the transactions of money lending with stringent provisions.

As per the bill, money lenders will be prohibited from providing loans at exorbitant rates. Henceforth, the state government from time to time by notification will fix the maximum rates of interest at which money lenders are entitled to provide loans.

Besides, the money lenders will have to return the immovable property offered by debtor in course of money lending. More importantly, money lenders will have to maintain their accounts and furnish them to the assistant registrar.

According to the bill, money lenders will be prohibited from carrying out business across the state but they would be allowed in area under licence and also as per the terms of licence. The bill was tabled again as the government had received Presidential assent recently for the Maharashtra Money Lending (Regulation) Bill 2010 passed by the state legislature by incorporating suggestions made by the union finance ministry. The government also withdrew ordinance in this regard.

Maharashtra minister for cooperation Harshvardhan Patil said an important provision has been included in the bill whereby immovable property acquired in course of money lending will be returned after a thorough inquiry by the district registrar. Further, it will be binding on the money lender to keep accounts and furnish copies to the assistant registrar.

No money lender will accept from debtor any article as a pawn, pledge or security for a loan without giving him a plain signed receipt for the same. It will also be mandatory for the money lender to maintain duplicates of such receipts in a separate register.

Patil said no money lender will receive from debtor or intending debtor any sum by way of compounded interest on a loan advanced or intended to be advanced or any sum by way of interest at a rate higher than the rate fixed by the government. He informed that the provision in this regard has been included that in certain cases the government found that money lenders were charging rate of interest up to 12%.