Gandhinagar, March 29: A bill seeking to regulate transactions worth several crores annually by moneylenders in Gujarat was today approved in the state assembly unopposed.
The bill makes registration of money lenders mandatory in the state. It also empowers the government to fix interest rates for the sector.
“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,” Minister for Cooperation Dileep Sanghani told the House.
“The government will be empowered to fix higher limit of the interest rates to be charged by lenders,” he said.
“The Non-Banking Finance Companies(NBFC) registered with the RBI will have to intimate the registrar in a prescribed format,” Sanghani said.
“With this Act coming in place, 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,” Sanghani told the House.
As per the provisions of bill, 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, jewellery, 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 instalment is paid by the debtor within two years of the transaction,” Sanghani said.
The money lenders in the state will also have to maintain books of accounts.
State Congress president Arjun Modhvadia
appreciated the government”s proposal to regulate money lending business in the state.
——–Agencies