Finally, Maharashtra Money Lending (Regulation) Act to become a reality

After 5 years, President gives assent

to Money Lending (Regulation) Act

* The law provides for five years’ imprisonment and fine up to Rs 50,000 to unauthorised money lenders
* At present, there are 12,000 authorised money lenders who have lent farmers Rs 737 crore

By Kartik Lokhande
It is five years since the announcement for a stringent law to punish private money lenders exploiting farmers. In October 2013, the Centre returned the draft of this much-awaited law to Maharashtra for the seventh time. After such a long wait and several changes, the President of India Pranab Mukherjee gave his assent to Maharashtra Money Lending (Regulation) Act on Friday.
In 2008, the then Chief Minister Vilasrao Deshmukh had announced to amend Bombay Money Lending Act to incorporate stringent punishment for private money-lenders exploiting farmers. His announcement had come after the then Deputy Chief Minister (now Home Minister) R R Patil had announced to punish money lenders hard, following a spate of farmers’ suicides especially in Vidarbha, due to burden of debt taken from private money lenders at usurious rates of interest.
Maharashtra Legislature had passed the Bill four years ago and had forwarded it to the President’s office for the latter’s assent. However, it was sent back with some queries. The round continued with the Bill sent back to Maharashtra Government seven times till October 2013. The previous drafts of the Bill had several provisions that overlapped with Central laws including the Companies Act, Banking Act, and Reserve Bank of India Act.
‘The Hitavada’ also had followed up the issue and had highlighted the fact that the delay in passage of the law had affected adversely the farmers. Unauthorised money lending had been a major cause of increase in farmers’ suicides in Vidarbha region. Interestingly, while the new law was awaiting the President’s assent, Maharashtra Government continued issuing/renewing licences to private money lenders.
With the much-awaited law getting the President’s assent, it is expected that farmers may get relief from unauthorised money lenders. Maharashtra Legislature will be informed about the President’s assent in the budget session starting from February 24 at Mumbai. At present, there are 12,000 authorised money lenders from whom farmers in the State have borrowed Rs 737 crore. However, borrowings from unauthorised money lenders is not on record and the amount is expected to be much higher than that from authorised money lenders.
Those violating the provisions of the law will attract five years’ imprisonment and fine up to Rs 50,000. Licensed money lenders also will have to follow norms laid down in the law. In case of violations, they also will attract a penalty of up to Rs 25,000 and imprisonment of up to one year.

State Govt to start helpline for ryots For effective implementation of Maharashtra Money Lending (Regulation) Act, the State Government will be starting a helpline for farmers. The helpline will be started at district and division levels. The farmers, whose complaint is not being registered by any of the authorities concerned, may place a call on the helpline number. Commissioner (Co-operation) and other top officers of Co-operation Department will supervise the functioning of the helpline.

Will farmers get back their land? The details about all provisions in the Maharashtra Money Lending (Regulation) Act are yet to come out. It will be interesting to see if the provision that enabled farmers to get back their land usurped by private money lenders, is still there.
After a spate of farmers’ suicides, it was alleged that money lenders had got possession of the land of farmers to whom they had given money. As the money was lent to farmers at usurious rates, they were unable to repay it. In lieu of that, money lenders got farmers’ lands. They did it smartly also by way of registering the ‘land deal’ under Indian Registration Act. When the Co-operation Department had tried to cancel such registries to restore possession of such lands to farmers, the action did not stand in the court of law. It required necessary amendment to Indian Registration Act apart from amendment to Bombay Money Lending Act.
Back then, MLA Devendra Fadnavis had alleged that passage of Maharashtra Money Lending (Regulation) Bill was being delayed as restoring possession of land from money lenders to farmers was the key issue. Whether the law that has got the President’s assent has that enabling provision for farmers, remains to be seen. 

(Published in The Hitavada CityLine on January 13, 2014)