Maharashtra Government Plans Stricter Money Lending Law Amid Crackdown on Illegal Operators

The Maharashtra government has announced plans to tighten regulations governing money-lending activities as part of a broader effort to address unlawful lending practices across the state.

The move follows investigations into a serious case involving alleged coercion linked to illegal debt recovery and organ trafficking.

Authorities indicated that legislative amendments and enhanced enforcement measures are being considered to strengthen oversight and improve borrower protection.

Proposed Amendments to Money-Lending Regulations

Minister of State for Home Pankaj Bhoyar informed the legislative assembly that the Maharashtra Money-Lending (Regulation) Act, 2014, is set to undergo review and possible amendment. 

The objective is to address gaps in enforcement and curb unauthorised lending operations.

The government is also examining whether stricter legal provisions, including the application of organised crime laws, may be invoked against offenders involved in serious violations.

Case Triggering Government Action

The policy response follows an incident involving a farmer from Chandrapur who was reportedly pressured into extreme measures while attempting to repay a loan. Investigations revealed that the borrower had already repaid amounts significantly exceeding the original loan value but continued to face coercion.

Authorities stated that several individuals connected to the case were operating without licences. Orders have been issued to seize properties linked to the accused lenders.

Investigation Into Wider Network

A Special Investigation Team (SIT) has been formed to examine the matter further. Preliminary findings suggest links to a broader network extending beyond Maharashtra, with suspected connections to locations in Tamil Nadu and Cambodia.

Officials indicated that intermediaries may have facilitated multiple illegal organ transactions, prompting coordination between law enforcement agencies across jurisdictions.

Statewide Enforcement Measures

As part of the crackdown, the state government has initiated action against illegal money-lenders across Maharashtra. District-level committees headed by collectors have been established to monitor enforcement efforts.

These committees are required to submit periodic reports to the government every three months, enabling ongoing assessment of compliance and enforcement outcomes.

Read More: CBDT Invites Stakeholder Inputs on Draft Income-tax Rules Ahead of April 2026 Rollout.

Conclusion

The proposed tightening of money-lending regulations reflects an effort by the Maharashtra government to strengthen oversight and address unlawful lending practices. Legislative amendments and coordinated enforcement actions are expected to shape future regulatory measures aimed at improving borrower protection and monitoring financial misconduct.

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