Money Lending Act: There is a lot of earning in the transaction of interest, especially for banks and financial institutions, whose income comes from the interest received on loans. This practice has been going on for years, and earlier it was not limited to banks only. People used to transact money on interest at the local level as well. This process has strengthened the financial system, due to which individuals and businesses get money in times of need.

However, even today Seth-Sahukars does this work but this work requires a license which most people do not have or do not know about. If you want to earn extra income by doing business of interest, then this is a good option.

You can also earn better by giving money on interest. In the last few years, apart from banks, NBFCs and microfinance companies have also emerged which are earning good money from the business of loans and interest. Let us tell you how you can do the business of giving money on interest with legal permission.

What is the Money Landing Act?

It is mandatory to obtain a license under the Money Landing Act to distribute money on interest. It is illegal to lend money on interest without a license. Banks and non-banking financial companies (NBFCs) receive banking licenses from the Reserve Bank of India (RBI). Whereas, common people receive licenses at the district level under the Money Lending Act. This legal process is important for the financial stability and protection of customers.

There are many poor and needy people in the country, to whom banks refuse to give loans for many reasons. In such a situation, people go to moneylenders sitting in the markets to borrow money.

Tax expert Balwant Jain, who knows this subject, says that a license is mandatory to start the work of money landing i.e. lending money on interest. It is illegal to distribute money on interest without a license. Whereas, interest is charged on the loan as per the instructions given in the license. It is illegal to charge interest more than the fixed rate.

How to get a license-

- To lend money on interest, a license has to be taken from a government institution under the Money Lending Act.

- There is a money lending law in different states of the country. In such a situation, you can start the work of lending money on interest by taking a license from a government institution authorized at the district level.

- In different states, you can get a money lending license from the Revenue Department, Municipality or an institution authorized by the government at the local level.

- After getting the license, every year the person has to present the account of distributing money on interest to the concerned institution. In this way, by taking a license, any person can do the work of lending money on interest privately.

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