The Madhya Pradesh state cabinet, on August 19, 2019, approved amendments to make unlicensed moneylending illegal. with this move, the tribals of the state will now be free of loans taken from unlicensed moneylenders, i.e., they will not be required to return the outstanding amount. As per the new amendments to the 1972 SC/ST Moneylending Act, all loans are taken by tribal people from unlicensed moneylenders in 89 tribal-dominated blocks of the state till August 15, 2019, will be waived off.
As such, moneylenders are now prohibited to operate without a licence and any loan given by them to tribal people will be null and void. There is also provision related to penal action for those moneylenders who try to force people to repay such loans. It amounts to three years of imprisonment and a fine of up to 1 lakh. The amendments also provide that the interest rates for loans to be given by licensed moneylenders will be decided by the state government.
Moneylenders used to charge exorbitant interest rates and also indulged in unscrupulous practices like forcing the poor to become bonded labour for generations if they failed to repay loans. The decision is likely to prove beneficial for about 1.5 crore tribal people in the state.
Also Read: Committee on Transformation of Indian Agriculture
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