Kerala Prohibition of Charging Exorbitant Interest Act, 2012
No: 2 Dated: Jan, 07 2013
The Kerala Prohibition of Charging Exorbitant Interest Act, 2012
(Act No. 2 of 2013)
An Act to prohibit lending of money for exorbitant interest and to provide for stringent punishment for charging exorbitant interest in the money lending business in the State of Kerala and for matters connected therewith or incidental thereto:
Preamble. - Whereas, it is expedient to prohibit lending of money for exorbitant interest and to provide for stringent punishment for charging exorbitant interest in the money lending business in the State of Kerala and for matters connected therewith or incidental thereto;
Be, it enacted in the Sixty-third Year of the Republic of India as follows:-
1. Short title and commencement. - (1) This Act may be called the Kerala Prohibition of Charging Exorbitant Interest Act, 2012.
(2) It shall be deemed to have come into force on the 27th day of August, 2012.
2. Definitions. - (1) In this Act, unless the context otherwise requires,-
(a) "daily vatti" means interest on daily basis which will work out to an interest rate more than that specified under sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of 1958);
(b) "debtor" means a person who receives loan for exorbitant interest;
(c) "exorbitant interest" means an interest at the rate more than the rate specified in sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 and includes daily vatti, hourly vatti, kandu vatti, meter vatti and thandal;
(d) "hourly vatti" means interest on hourly basis which will work out to an interest rate more than that specified under sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of 1958);
(e) "kandu vatti" means an interest which will work out to an interest rate more than that specified under sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of 1958);
(f) "loan" means an advance of money for daily vatti, hourly vatti, kandu vatti, meter vatti or thandal;
(g) "meter vatti" means an interest which will work out to an interest rate more than that specified under sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of 1958) for every day on the loan amount not paid within the stipulated time;
(h) "thandal" means interest which will work out to an interest rate more than that specified under sub-section (1) of section 7 of the Kerala Money-Lenders Act, 1958 (35 of 1958) which is to be recovered daily along with the part of the loan amount ;
(2) Words and expressions used but not defined in this Act and defined in the Kerala Money-Lenders Act, 1958 (35 of 1958) shall have the meanings respectively assigned to them in that Act;
3. Prohibition of charging exorbitant interest. - No person shall charge exorbitant interest on any loan advanced by him.
4. Offences to be cognizable and non-bailable. - Any offence under this Act shall be cognizable and non-bailable.