(a) whether a technical group formed by Reserve Bank of India has recently mooted a legislation
for regulating money lending, besides fixing of maximum interest rates and compulsory
registration of money lenders by the State Governments;
(b) if so, the deterils thereof;
(c) whether the Union Government has since examined the report of the technical group; and
(d) if so, the reaction thereto and by when it is likely to be implemented ?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PAWAN KUMAR BANSAL)
(a) to (d): Pursuant to the announcement made by the Governor, Reserve Bank of India (RBI) in
the Annual Policy Statement for the year 2006-07, a Technical Group was set up under the
chairmanship of Shri S.C. Gupta, the then Legal Adviser, RBI to review the efficacy of the
existing legislative framework that governs money lending as also the enforcement machinery
in different States and make recommendations for its improvement. The model legislation
proposed by the Technical Group` provides for the following:
# a simple and hassle free procedure for compulsory registration and periodical renewal,
of their registration by money lenders;
# a simplified dispute resolution mechanism to enstire better enforcement;
# adoption of the rule of Damdupat restricting the maximum amount of interest chargeable
by the money lender; and
The report of the Group has been, submitted and is placed on the website of RBI for comments
of the stiikeholders. The process of consultation is to take some time as the report has been
sent to all the State Government also for their comments. In the circumstances no time frame
for its implementation can be specified.