Duty of MFIs to maintain accounts and furnish copies

(1) All borrowings by a member of an SHG from an MFI shall be contracted in the manner, form and format prescribed under the Act.

(2) Every MFI shall keep and maintain a cash book, a ledger and such other books of account in such form and in such manner as may be prescribed.

(3) Every MFI shall, - (a) deliver or cause to be delivered, to the borrower within seven days from the date on which a loan is made, a statement in the prescribed form showing in clear and distinct terms the amount and date of the loan and of its maturity, the name and address of the functionary of the MFI and the effective rate of interest charged; (b) upon repayment of a loan in full, the MFI shall obtain an indelible mark on every paper signed by the borrower with words indicating such repayment and provide copies thereof to the borrower.

(4) No MFI shall receive any payment from a borrower on account of any loan without giving him a duly signed receipt for the payment.

(5) An MFI shall, on a demand in writing by the borrower, supply a copy of any document relating to a loan obtained by him, or if the borrower so requires, to any person specified in that behalf in the demand: Provided that in respect of loans given prior to the commencement of this Act, it shall be obligatory for the lender to specify if any security was accepted from the borrower.

(6) All tranches of repayment shall be made by the SHG or its members at the office of the Gram Panchayat or at a public place designated by the District Collectors only.

(7) MFI shall not deploy any agents for recovery nor shall use any other coercive action either by itself or by its agents for recovery of money from the borrower; and any form of coercive recovery including but not limited to visiting the house of the borrower shall, apart being punishable under the provisions of the Act, empower the Registering Authority to suspend or cancel the license of such an MFI as provided in section 5.