Bill seeking stricter punishment for illegal money-lenders passed in Maharashtra assembly

Mumbai, Jul 7 (PTI) The Maharashtra legislative assembly on Tuesday passed a bill that proposes to increase the punishment given to unauthorised money-lenders in the state, by providing for a maximum jail term of seven years and fine up to Rs 1 lakh. The bill aims to provide protection to borrowers. The Maharashtra Money-Lending (Regulation) (Amendment) Bill, 2026, introduced by Cooperation Minister Babasaheb Patil, seeks to amend the existing law by increasing penalties for lending money without a valid licence, obtaining a licence using a fictitious name, operating from unauthorised premises and harassing or abetting the harassment of borrowers for loan recovery. Under the proposed amendments, the maximum punishment for carrying on money-lending without a valid licence would be enhanced from five years' imprisonment to seven years, while the maximum fine would be doubled from Rs 50,000 to Rs 1 lakh. The bill also proposes to increase the punishment for obtaining a licence under a fictitious name or operating from an unauthorised location. The maximum imprisonment for a first offence would be enhanced from one year to three years and the fine from Rs 15,000 to Rs 50,000. For subsequent offences, the maximum jail term would be increased from five years to seven years and the fine from Rs 50,000 to Rs 1 lakh. It further seeks to raise the punishment for molesting or abetting the molestation of a borrower during debt recovery from two years' imprisonment to three years, while increasing the maximum fine from Rs 5,000 to Rs 1 lakh. According to the Statement of Objects and Reasons, despite the existing penal provisions, certain individuals and entities continue to engage in illegal money-lending activities, adversely affecting borrowers and weakening the law's deterrent effect. The amendments are intended to curb repeated violations, protect borrowers from exploitation and ensure greater accountability of offenders. PTI MR NP