Madhya Pradesh government may amend Money Lenders Act | Latest News India - Hindustan Times
close_game
close_game

Madhya Pradesh government may amend Money Lenders Act

Bhopal | By
May 16, 2019 07:29 AM IST

Government officials familiar with the matter said that the move comes against the backdrop ta suicides by at least four debt-ridden farmers over the past three weeks; all four had borrowed from moneylenders.

The Madhya Pradesh government is considering amending the 84-year-old Money Lenders Act to define the payment schedule and caps on interest rates in an attempt to help farmers who have borrowed from moneylenders.

The Madhya Pradesh government is considering amending the 84-year-old Money Lenders Act to define the payment schedule and caps on interest rates in an attempt to help farmers who have borrowed from moneylenders.(Mujeeb Faruqui/HT File Photo)
The Madhya Pradesh government is considering amending the 84-year-old Money Lenders Act to define the payment schedule and caps on interest rates in an attempt to help farmers who have borrowed from moneylenders.(Mujeeb Faruqui/HT File Photo)

Government officials familiar with the matter said that the move comes against the backdrop ta suicides by at least four debt-ridden farmers over the past three weeks; all four had borrowed from moneylenders.

Hindustan Times - your fastest source for breaking news! Read now.

The decision was taken after a meeting of the state’s chief secretary with bankers, officials of non-banking financial companies (NBFCs), the state’s finance, agriculture, and other relevant departments, the officials added.

They said that the Madhya Pradesh finance and law departments have been tasked with coming up with the amendments.The changes being considered include: caps on the interest that can be charged; a written agreement between the lender and borrower; and penalties for moneylenders charging more interest than mandated.

Legislations for regulation money lending are state-specific in India. Maharashtra defines interest rates as MP plans to do. Section 31 of The Maharashtra Money-lending (Regulation) Act, 2014, says, “The State Government may by notification in the Official Gazette, fix the maximum rates of interest to be charged by a moneylender in respect of secured loan and unsecured loan...”.

The current legislation is largely focused on licensing of moneylenders. Although bank credit is available to farmers, many still prefer to take small unsecured loans from local moneylenders, usually at a high interest rate. “In the 1934 Money Lenders Act, the last amendment was done in 2001... The main reason behind the plight of farmers is money lenders’ malpractices and we want to resolve this,” said SR Mohanty, the state’s chief secretary.Leader of opposition and former rural and panchayat minister Gopal Bhargava (from the Bharatiya Janata Party) said: “The farmers are facing a tough time due to unfulfilled promises of the Congress and the Congress government wants to divert the attention of farmers by underlining the flaws in the law.”

Congress spokesperson JP Dhanopia said, “There is a need to amend the law and that is what government officers are doing. Everybody knows how moneylenders are harassing farmers.” Justice (retired) Abhay Gohil said, “All acts related to money lenders were made to stop the exploitation of people especially in rural areas. Like Maharashtra, Madhya Pradesh can bring a new law which is more relevant to present-day conditions. Fixing interest rates will strengthen the law to act against the harassment by money lenders. The rate should be decided as per RBI guidelines.”

Unveiling Elections 2024: The Big Picture', a fresh segment in HT's talk show 'The Interview with Kumkum Chadha', where leaders across the political spectrum discuss the upcoming general elections. Watch now!

Get Current Updates on India News, Election 2024, Mukhtar Ansari Death News Live, Bihar Board 10th Result 2024 Live along with Latest News and Top Headlines from India and around the world.
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    She is a senior reporter based at Bhopal. She covers higher education, social issues, youth affairs, woman and child development related issues, sports and business & industries.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On