Hyderabad: The Andhra Pradesh Assembly
today passed a landmark legislation that will regulate money
lending and protect the interests of borrowers, particularly
those availing of micro finance.
The AP Money Lenders and Accredited Loan Providers Act,
2010, saw the light of the day 13 years after it was first
introduced in the state Assembly.
The Assembly passed the legislation in the absence of
members of the principal Opposition TDP, CPI, CPM and BJP
parties, who were suspended for the day. The Bill was cleared
by the Legislative Council on July 12.
Moving the legislation, Revenue Minister Dharmana Prasada
Rao said it was a foolproof law that would provide major
relief for farmers and other poorer sections of society who
borrowed smaller amounts from private moneylenders.
The law is in accordance with the model legislation on
money lending suggested by Reserve Bank, he said. "Many
borrowers committed suicide in the state in the last few years
unable to clear the loans on which the lenders charged
exorbitant interest rates. The law will check this trend."
Private money lenders who charge exorbitant interest
rates will be heavily penalised, he added.
Violation of certain provisions of the law will attract a
penalty up to Rs 20,000 and/or imprisonment up to one year.