RBI tech group recommends model money lending legislation

By Staff
|
Google Oneindia News

Kolkata, Jul 25 (UNI) The Technical Group, set up by the Reserve Bank of India has recommended a model law.

The group in its ''policy statements for 2006-07'' today said the state governments, who do not have a comprehensive legislation in place for governing money lending, should follow the new legislation.

The proposed model law reflects significant elements of similar legislation, available internationally and domestically.

The technical group has recommended some modifications to the existing legislation to facilitate quick resolution and better enforcement. The main features of the model legislation proposed by the technical group include reviewing the efficacy of the existing legislative framework,which governs money lending, reviewing the enforcement machinery in different states and making recommendations to state governments for improving the legal and enforcement framework in the interest of rural households.

A technical group was contituted under the chairmanship of the then RBI legal advisor-in-charge S C Gupta and secretaries from three select state governments and senior RBI officers.

The group has also explored establishment of a link between the formal and informal credit providers,whereby a money lender who is an "accredited loan provider" may serve as an additional credit delivery channel for the formal sector,provided there are safeguard measures.

UNI

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