Daijiworld Media Network - Mumbai
Mumbai, Jul 7: The Maharashtra government on Tuesday introduced a Bill in the State Assembly proposing stricter penalties for illegal money-lending activities, with the aim of protecting farmers and other vulnerable borrowers from exploitation and harassment.
Presented by Cooperation Minister Babasaheb Patil, the legislation seeks to amend the Maharashtra Money-Lending (Regulation) Act, 2014 by increasing prison terms and monetary fines for those engaged in unauthorised lending.
Under the proposed amendments, the maximum punishment for operating an illegal money-lending business will be enhanced from five years to seven years of imprisonment, while the maximum fine will be doubled from Rs 50,000 to Rs 1 lakh.
The move comes after members from both the ruling alliance and the Opposition recently demanded tougher action against unlicensed private money-lenders during discussions in the Assembly.
Legislators pointed to several cases across the state where borrowers, particularly farmers, were allegedly subjected to exorbitant interest rates and persistent harassment for loan recovery. They argued that such practices have contributed to farmer suicides and that existing legal provisions have failed to deter offenders.
The government said the amendments are intended to strengthen the enforcement of the 2014 Act by making punishments more stringent for repeat violators and those operating outside the legal framework.
At present, the law provides for imprisonment and fines against individuals who conduct money-lending without a valid licence, obtain licences under false identities or operate from unauthorised locations. It also prescribes penalties for those who harass borrowers during loan recovery.
The proposed amendment to Section 39 of the Act increases the maximum jail term from five years to seven years and raises the maximum fine from Rs 50,000 to Rs 1 lakh.
Changes have also been proposed to Section 41(c), under which the punishment would be enhanced from one year to up to three years of imprisonment, while the fine would increase from Rs 15,000 to Rs 50,000.
In addition, the Bill seeks to revise references in certain provisions by extending the applicable imprisonment threshold from "more than five years" to "more than seven years."
According to the Statement of Objects and Reasons accompanying the Bill, the 2014 legislation was enacted to safeguard farmers and other debtors from exploitation through strict legal and social measures. However, the government noted that illegal money-lending activities have continued despite the existing penal provisions.
The Bill states that repeated violations by unauthorised lenders have weakened the effectiveness of the law and reduced its deterrent value.
By strengthening punishments for operating without a licence, using fictitious identities and conducting transactions from unauthorised locations, the government aims to improve accountability, curb illegal lending practices and provide stronger legal protection to borrowers across the state.