MONEY LENDING LICENSE

WHAT IS MONEY LENDING ?

"In order to establish the he is carrying on the business it is not sufficient to prove that he has occasionally lent money at remunerative rates of interest it is necessary to prove some degree of system and continuity in his money lending transactions and something more than loans to friends or relatives. In considering whether a person is carrying on a business of money-lending all loans made by him must be taken into account”

Money Lenders Act, makes it mandatory for a money lender to register their name and obtain a license for carrying out such activities.

Applicable laws:

  1. Requirement of registration/license for carrying on the business of money lending within a State/a portion of the State and penalties for carrying on business without licence.
  2. Maximum rates of interest that can be charged.
  3. Duties of the moneylenders with respect to maintaining and providing statement of accounts to the debtors.
  4. Penalties for intimidating the debtors or interfering with their day-to-day activities, including the cognizability of such offences.
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