Illegal Money Lending
2 months ago
My older sister took loan from a women . She used to charge 16% interest per month . My sister has paid a lots of interest and now she is not in a condition to bear more interest debt . She stopped paying the money and the women from whom we took money started threatning us . So they made her sign a deed where my sister agreed to pay the money in installments. she also made us sign some cheques but they got bounced. But the women who lent us money has no legal license for this work . What should we do ?
A.Dear Client,
Obtaining a loan from private, unlicensed agencies leaves you without legal recourse, as engaging in money lending without the necessary licenses violates the Prevention of Money Laundering Act, 2002. This act, aimed at combating the illegal legitimization of income from unlawful sources, empowers the government to seize property acquired through such proceeds. Only recognized and approved NBFCs or Financial Institutions are permitted to conduct financial transactions or engage in money lending. According to Section 3 of the PMLA, anyone directly or indirectly involved in processes related to the proceeds of crime may face imprisonment from three to seven years.
In case of harassment by the lender, you can issue a legal notice instructing them to cease any form of harassment, stating your intention to refund the money with interest per the Bank rate. Without documented financial transactions, both the lender and borrower lack grounds for legal action against each other. In extreme situations, you can file a complaint with the police or the relevant Magistrate's court under Section 200 of the Cr. PC.
Obtaining a loan from private, unlicensed agencies leaves you without legal recourse, as engaging in money lending without the necessary licenses violates the Prevention of Money Laundering Act, 2002. This act, aimed at combating the illegal legitimization of income from unlawful sources, empowers the government to seize property acquired through such proceeds. Only recognized and approved NBFCs or Financial Institutions are permitted to conduct financial transactions or engage in money lending. According to Section 3 of the PMLA, anyone directly or indirectly involved in processes related to the proceeds of crime may face imprisonment from three to seven years.
In case of harassment by the lender, you can issue a legal notice instructing them to cease any form of harassment, stating your intention to refund the money with interest per the Bank rate. Without documented financial transactions, both the lender and borrower lack grounds for legal action against each other. In extreme situations, you can file a complaint with the police or the relevant Magistrate's court under Section 200 of the Cr. PC.
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A.Dear Client,
Since you availed the loan from private and unauthorized/unlicensed agencies, you have no legal remedy to ask for because trading of money lending or any other financial transaction without any license or permission of the concerned regulatory authority like RBI, SEBI, is an offense under the Prevention of Money Laundering Act, 2002 (PMLA) which was enacted to fight against the criminal offense of legalizing the income/profits from an illegal source. The Prevention of Money Laundering Act, 2002 enables the Government or the public authority to confiscate the property earned from the illegally gained proceeds. Nobody other than the recognized and approved NBFC or Financial Institution can be involved in the trading of financial transactions or money lending business. As per Sec.3 of PMLA, 2002, whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of the offense of money-laundering. The offender can face imprisonment for not less than three years, extending up to seven years. In case of harassment by the lender, you can serve a strong legal notice in that direction asking him to refrain from any type of harassment or coercive action and informing him that the money will be refunded with interest as per the Bank rate. In the absence of recorded financial transactions, both the lender and borrower are unable to take any action against each other. In extreme situations, you can make a complaint either before the police or before the court of the Magistrate concerned under Sec.200 of Cr. PC. Reach out to an Advocate for guidance and steps if required.
Since you availed the loan from private and unauthorized/unlicensed agencies, you have no legal remedy to ask for because trading of money lending or any other financial transaction without any license or permission of the concerned regulatory authority like RBI, SEBI, is an offense under the Prevention of Money Laundering Act, 2002 (PMLA) which was enacted to fight against the criminal offense of legalizing the income/profits from an illegal source. The Prevention of Money Laundering Act, 2002 enables the Government or the public authority to confiscate the property earned from the illegally gained proceeds. Nobody other than the recognized and approved NBFC or Financial Institution can be involved in the trading of financial transactions or money lending business. As per Sec.3 of PMLA, 2002, whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of the offense of money-laundering. The offender can face imprisonment for not less than three years, extending up to seven years. In case of harassment by the lender, you can serve a strong legal notice in that direction asking him to refrain from any type of harassment or coercive action and informing him that the money will be refunded with interest as per the Bank rate. In the absence of recorded financial transactions, both the lender and borrower are unable to take any action against each other. In extreme situations, you can make a complaint either before the police or before the court of the Magistrate concerned under Sec.200 of Cr. PC. Reach out to an Advocate for guidance and steps if required.
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