Gujarat Assembly passes bill to Regulate Illegal Money-Lending

Gujarat Assembly today passed a bill to regulate money lending transactions.

-The bill makes registration of money lenders mandatory in the state.

-The government will be empowered to fix higher limit of the interest rates to be charged by lenders.

-The government will appoint a Registrar General of Money Lenders, with whom all the persons intending to carry out the business of money lending will have to be registered.

-The Non-Banking Finance Companies(NBFC) registered with the RBI, will have to intimate the registrar in a prescribed format.

-The money lenders will not be able to charge compound interest on borrowings from the debtors.

-The mortgages done in lieu of lending will have to be declared with the registrar within one month of transaction.

-On default in repayment by debtors neither direct recovery by the lenders will be permissible nor they will be able to seize assets like vehicles, jewelery, property, in the wake of cash borrowings.

-In the event of default in repayment the lenders will have to approach the government for a settlement, especially in cases where no installment is paid by the debtor within two years of the transaction.

-The money lenders in the state will also have to maintain books of accounts.