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- Central Government Proposes Crackdown On Unregulated Lending, May Ban Loan Apps And Impose ₹1 Crore Penalty, 10 year Jail Term
New Delhi3 minutes ago
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The central government is planning to ban unregulated lending. The government has presented a draft bill regarding this plan. This bill calls for banning infringing online loan apps.
Apart from this, a fine of Rs 1 crore and 10 years of jail has also been proposed. This information has been given in a report of Business Standard. These measures were suggested for the first time in the November 2021 report of the group working on digital lending of the Reserve Bank of India i.e. RBI.
What is the purpose of the government’s draft bill?
The title of this draft bill of the Central Government is – Banning of Unregulated Lending Activities (BULA). The purpose of this bill is to ban individuals and companies from giving loans to people without taking permission from RBI or any other regulatory bodies.
Special things related to the government’s draft bill
- Platforms providing digital loans have also been included in this bill. Unauthorized platforms cannot give loans legally.
- Giving unauthorized loan can result in a jail term of 7 to 10 years and a fine ranging from Rs 2 lakh to Rs 1 crore.
- On the other hand, if the loan givers adopt forceful recovery methods, they will be given a jail sentence of 3 to 10 years.
- Cases involving multiple states and union territories or involving large amounts of money will be transferred to CBI.
Fraudulent loan apps a matter of concern
The bill comes at a time when fraudulent loan apps have become a matter of concern due to their coercive recovery practices, exorbitant interest rates and hidden fees.
Google removed more than 2,200 apps from Play Store
Due to the pressure of such loan apps, many people go into depression and some even commit suicide. For this reason, Google had removed more than 2,200 such apps from the Play Store between September 2022 and August 2023.