New law announced to prevent illegal pvt lending business | india | Hindustan Times
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New law announced to prevent illegal pvt lending business

While most of the measures are not bearing fruits when it comes to containing the farmers suicides in Vidarbha, the state has now decided to address the root cause. The government announced to bring new law for preventing illegal private lending business, reports Yogesh Joshi.

india Updated: Jan 02, 2009 18:02 IST
Yogesh Joshi

While most of the measures are not bearing fruits when it comes to containing the farmers suicides in Vidarbha, the state has now decided to address the root cause. The government on Friday announced to bring new law for preventing illegal private lending business.



The new law, which will overcome the old Bombay Money-lenders Act 1946, will have more effective teeth to stop illegal money lenders from exploiting farmers of the state, claimed Maharashtra minister for cooperatives Harshawardhan Patil.



"The draft of the new law Maharashtra prevention of money lenders Act-2008 is ready and has been sent to center for their assent. Once we get the assent, an ordinance will be in place which will be turned into law in the coming budget session of Maharashtra assembly", Patil said in Pune on Friday after inaugurating the workshop for officials of cooperatives department.



With the new law is imminent, the state can expect some check on illegally operating money-lenders in rural parts of Vidarbha and Marathwada. These money-lenders have been in the center of storm as the farmers, after banks refusing them for loans, approach private money lenders, who often lend them money on exorbitant rates. According to the report submitted by economists Narendra Jadhav on farmers suicide, "Constant pressure from banks and more so from unauthorized moneylenders led to severe mental distress, compromising their dignity and resultant frustration drove the self-respecting farmers to commit suicide". It has been noticed that most of the money lenders operating illegally in some parts of Vidarbha are from Andhra Pradesh. After the neighboring state clamped down against these lenders, some of them intruded in Vidarbha through border areas to flourish their business.



The new law will be sans the loopholes in the old law and additional checks. "In section 13 (b) of old money lenders act, there are certain loopholes, through which the unauthorized money lenders exploit the farmers. In the new law concerns have been addressed while removing these loopholes", said Patil. According to the minister, there have been 5400 complaints against unauthorized moneylenders out of which 1600 cases are disposed off.



While the state has shown willingness of taking steps to address the farmers suicide problem, the question that is being asked is the effective implementation of the law. Vidarbha Jan Andolan Samiti chief Kishor Tiwari, who has been tracking the suicides, said, "The state has not done much to effectively implement the existing money lenders act. Despite then home minister R R Patil's stern warning to money lenders, very few cases were registered against them while exploitation of farmers by these people were blatantly going on".



Tiwari further said that "in district like Yeotmal and Chandrapur, private money lenders, who are originally from Andhra Pradesh, are operating openly".