UP amends Money Lending Act

The UP government has amended the UP Regulation of Money Lending Act, 1976. The amendment seeks to enhance punishment for money lenders in case of coercive measures adopted for recovery of loans.

In case of non-recovery of loans, money lenders will have to inform the registrar, the licensing authority for money lenders. Any attempt to recover loans without informing the registrar will invite imprisonment of three years and fine of Rs 5,000 or both.

As per the amended law, the money lenders will serve a notice of one month to the borrower, and also send a copy of the same to the registrar.

The tenure of the money lending licence has been reduced from ten years to three years. Money lenders will now be required to submit all information of the loan account sought by the borrower.

The act also empowers the registrar to inspect the accounts of the money lenders every six months, and issue periodic guidelines and directions for the conduct of the business in a transparent manner.