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News Topical, Digital Desk : The illegal activities of apps and agencies that dupe innocent people in the name of giving loans and charge them huge amounts of money are now going to end. The government is bringing a law to take strict action against those who cheat in the name of giving loans. The name of this proposed law is Banking of Unregulated Lending Activities (BULA), which may soon get the approval of the cabinet.
After the implementation of this law, whether someone does the business of commercial lending personally or through digital medium, it will be mandatory for him to take approval from RBI or State Bank of India Act 1955 or under the money lending law of any state.
strict action will be taken
Those who do not take permission may have to go to jail along with a heavy fine. A jail term of two to seven years and a fine of two lakh to one crore rupees is proposed. Loans taken from a relative have been kept out of the purview of this proposed law.
The special thing about the proposed law will be that there will be a database of the loan giving agency or app approved by the government agency, by going to which it will be possible to check whether the person from whom you are taking the loan is authorized to do the business of giving loans or not.
Last year, the Finance Ministry had released a draft of the proposed law
The government is bringing this law to ban digital lending apps mainly operated from China and other countries. The apps operated from China started blackmailing people by giving them loans, due to which many people even committed suicide.
The draft was issued by the Ministry of Finance
On the recommendation of RBI and Finance Ministry, many such apps were banned, but there was no permanent solution to this. Keeping this in mind, last year a draft was issued by the Finance Ministry regarding this proposed law, on which opinions were sought from stakeholders. Now the preparation of the proposed law is in the final stage.
A special court can be formed for such cases
According to the proposed law, a separate team will be appointed to take action against those who give loans without the permission of the regulator, which will have the authority to investigate such cases. If needed, a special court can also be formed for such cases. The proposed law also provides for action against those who do misleading publicity in the name of giving loans.
There will also be a ban on advertising
Advertisements like 'Contact us to get a loan at low interest rate' or 'Get a loan in five minutes' are often seen. This type of advertisement will also be banned. Six years ago, the government brought a law to curb the business of unregulated deposits, which is known as Ponzi scheme. Now unregulated loans will be banned.
What will happen in the law
- Those who do not take permission may have to go to jail along with heavy fine
- Loans taken from a relative are excluded from the scope of this proposed law
- A database of loan giving agency or app will be created
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