NPCC concerned over money lending business

DIMAPUR | Publish Date: 9/14/2019 10:55:15 AM IST

Expressing concern over the mushrooming of private money lenders in Nagaland, the Nagaland Pradesh Congress Committee (NPCC) has demanded that the state government strictly enforce the Nagaland Money Lenders Act, 2005 and rein in those “money lenders”.

A press release from NPCC communications department stated that, ignorance on the part of borrowers has also contributed to this vicious cycle of debt trap being laid out by unscrupulous money lenders. NPCC pointed out that Nagaland Money Lenders Act, 2005 Section 24 stipulates that those engaged in money lending business without a license shall be punishable with imprisonment for a term which may extend to six months or with a fine which may extend to Rs. 2500/- or with both. 
Moreover, as per the relevant sub section 7, NPCC stated no money lender can charge interest at a rate exceeding more than 33% above the prevailing average ban rates of interests on loans and rate of interest shall be per annum simple interest on the principal amount of the loan. However, NPCC said that in the prevailing scenario, rate of interest charged by some money lenders are as high as 120% per annum which is also compounded. 
NPCC also stated that, the Act also guarantees that any aggrieved person can file a money suit in respect of any offence like excess charge of interest, no proper maintenance of records, failure to keep full and detailed description of each of the articles taken in pawn by the pawn broker. 
NPCC further stated that borrowers many of whom are victims out of ignorance must also come forward to file criminal complaint against the unscrupulous money lenders. 


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