Tamil Nadu Moves to Curb Coercive Loan Recovery Practices
In a significant move to protect borrowers from aggressive loan recovery tactics, Tamil Nadu’s Deputy Chief Minister has introduced a bill aimed at regulating money lending practices across the state. The proposed legislation seeks to prevent coercive recovery methods employed by certain financial entities, ensuring fair treatment of borrowers.
Tamil Nadu Money Lending
The bill outlines strict guidelines for money lending operations, mandating registration for all lenders and setting clear interest rate caps to prevent usurious practices. It also proposes the establishment of a regulatory authority to oversee lending activities and address grievances from borrowers.
Coercive Loan Recovery
A key focus of the legislation is to curb coercive recovery methods that have led to distress among borrowers. The bill prohibits practices such as harassment, intimidation, and public shaming by lenders during the recovery process. It also provides for penalties and legal action against entities violating these provisions.
TN Loan Regulation
The proposed law aims to bring transparency and accountability to the money lending sector in Tamil Nadu. By setting clear operational standards and enforcing ethical recovery practices, the government seeks to protect vulnerable borrowers from exploitation and financial hardship.
The introduction of this bill reflects the state’s commitment to financial inclusion and consumer protection, ensuring that lending practices contribute positively to the economic well-being of its citizens.
