Mumbai, July 7 (SocialNews.XYZ) In a major move to protect vulnerable farmers and borrowers from exploitation, the Maharashtra government on Tuesday introduced a Bill which aimed at heavily increasing punishments for illegal money-lending practices across the state.
The Bill, which was presented by the State Cooperation Minister Babasaheb Patil in the State Assembly, seeks to further amend the existing Maharashtra Money-Lending (Regulation) Act, 2014.
The critical amendments to the Maharashtra Money-Lending (Regulation) Act, 2014, aimed at cracking down on illicit lenders and providing relief to distressed borrowers.
The approved changes significantly sharpen the legal teeth of the existing Act by hiking both jail terms and financial penalties.
The Bill proposes to increase the penalty for illegal money lending in the state from the current five years to seven years of imprisonment, and double the fine from Rs 50,000 to Rs 1,00,000.
Last week, both the Opposition and ruling party members in the Legislative Assembly strongly demanded a crackdown on unauthorised private money lending.
Numerous instances of illegal money lending have been coming to light across Maharashtra.
Discussions in the Legislative Assembly highlighted that excessive interest rates and relentless harassment for repayment have driven farmers to suicide in several places, with allegations that a lack of legal deterrence has led to a rise in such incidents.
Consequently, the state government decided to amend the existing Maharashtra Money Lending (Regulation) Act, 2014.
Under three specific sections of this Act, there are provisions for imprisonment and fines to restrict individuals who operate a money-lending business without a valid license, obtain a license under a false name, or operate from an unapproved location.
Additionally, harassing a debtor for loan recovery currently carries a legal penalty of up to five years in prison and a fine of Rs 50,000.
However, as certain individuals and institutions continue to engage in illegal money lending -- proving that the existing law lacks sufficient teeth -- the state government is modifying Section 39.
The prison term under this Section will be increased from "up to five years" to "up to seven years", and the fine from "up to Rs 50,000" to "up to Rs 1,00,000".
In Section 41, Clause (c), the prison sentence will be increased from one year to up to three years, and the applicable fine will be raised from Rs 15,000 to Rs 50,000.
In specific cases, the provision will also be amended from "more than five years" to "more than seven years" of imprisonment.
According to the Bill, the original 2014 Act was enacted to implement stringent social and legal measures to protect farmers-debtors from harassment.
While penal provisions already exist in Sections 39, 41, and 45 of the Act -- penalising individuals who operate without a valid license, use fictitious names, or molest debtors -- the state government noted that illegal activities have persistently continued.
The Bill highlights that repeated violations by unauthorised money-lenders have significantly weakened the regulatory framework and undermined the law's deterrent effects.
"To curb these recurring illegal operations and prevent borrower exploitation, the amendment focuses specifically on enhancing the severity of punishments for running a money-lending business without a valid license and obtaining a license under a fictitious name or carrying out transactions at unapproved locations. By modernising these specific sections, the state government intends to ensure greater accountability and strengthen the implementation of the law against habitual offenders," the Bill said.
Source: IANS
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