The central government has introduced a draft bill to address the growing problem of unregulated lending,

Description

The central government has introduced a draft bill to address the growing problem of unregulated lending, following recommendations from the Reserve Bank of India’s Working Group on Digital Lending. The bill, known as the Banning of Unregulated Lending Activities (BULA), aims to safeguard borrowers from unauthorized lenders and curb illegal lending practices.

Definition Of Unregulated Lending

The bill defines unregulated lending as any loan provided outside the established legal framework, particularly focusing on loans offered by digital lending platforms that are not authorized by the relevant authorities.

Unauthorized lenders will face severe consequences under the bill. Penalties for such activities include prison terms of up to seven years, accompanied by fines ranging from Rupees 2 lakh to Rupees 1 crore. If lenders engage in coercive recovery tactics, the penalties are more stringent, with prison sentences extending from three to ten years, along with higher fines.

Investigation And Enforcement

The Central Bureau of Investigation (CBI) will be tasked with investigating cases involving large sums of money or issues spanning multiple states. This is designed to ensure thorough and efficient enforcement of the law, ensuring that those involved in unregulated lending are held accountable.

The bill aims to protect borrowers from unscrupulous lending practices by banning all unregulated lending activities, though loans to family members are excluded from the ban.

Growing Concerns About Fraudulent Lending

The rise of fraudulent lending practices, including aggressive recovery tactics and exorbitant interest rates, has caused significant distress to borrowers. In response, the government has removed over 2,200 dubious lending apps from the Google Play Store between September 2022 and August 2023.

Suggestions For Strengthening Lending System

Legal experts have proposed several measures to improve the lending landscape, such as creating a public registry of authorized lenders, securing systems to prevent data tampering, setting up a portal for reporting fraudulent practices, and initiating campaigns to promote financial literacy.

Stakeholder Feedback

Stakeholders have until February 13, 2025, to submit their feedback on the draft bill. Legal experts are hopeful that this proposed legislation will address the issues surrounding unregulated lending, reduce fraudulent practices, and foster greater transparency in the lending sector.

Welcome to Notopedia.com, your free learning platform that caters to the diverse needs of students and aspirants across a spectrum of entrance exams and educational endeavors. Whether you're preparing for highly anticipated exams like CAT 2023, NEET 2023, JEE Main, or bank job vacancies, our platform offers a wealth of resources to guide you towards success. Stay up-to-date with the latest exam dates, announcements, and results for various government recruitment exams, including SSC CGL, CHSL, NDA, and UPSC. Explore comprehensive study materials, sample papers, and exam patterns to hone your skills and boost your confidence. From important dates like CBSE Class 10 and 12 date sheets to exam-specific information like JEE Main 2023 application form date, we cover it all. Notopedia.com is your go-to source for everything from admissions and admit cards to scholarships and college information. Whether you're aiming for a career in defense, government, banking, or higher education, our free learning platform equips you with the knowledge and resources you need to excel. Join us in your educational journey and unlock a world of opportunities, guidance, and comprehensive support.

For more Updates and Information - Visit Notopedia's Bulletin Board

For Latest Sarkari Jobs - Visit Notopedia's Sarkari Jobs Section

For access to more than 20,000 Colleges - Visit Notopedia's College Section

For School Studies and Exams Preparation across 14 Boards - Visit Notopedia's School Section

For Comprehensive Preparation of Sarkari Job Exams - Visit Notopedia's Sarkari Exams Section

For Comprehensive Preparation of Competitive Exams - Visit Notopedia's College Entrance Exams Section