Application and scope

Application and scope.-

1. (1) This Act shall apply to all individuals, partnership firms, limited liability partnerships, companies, societies, trusts, digital lending platforms, mobile applications, and any other entities or persons engaged in the business of advancing micro loans or small loans within the territorial limits of Bihar, irrespective of their place of incorporation, registration, or domicile.
2. (2) The provisions of this Act shall not apply to the following entities in respect of their lending operations:
   • (a) Scheduled commercial banks as defined under the Banking Regulation Act, 1949;
   • (b) Regional Rural Banks established under the Regional Rural Banks Act, 1976;
   • (c) Non-Banking Financial Companies holding valid certificate of registration issued by the Reserve Bank of India under the Reserve Bank of India Act, 1934, and operating under RBI guidelines;
   • (d) Housing Finance Companies regulated under National Housing Bank Act, 1987;
   • (e) Primary agricultural credit societies, district central cooperative banks, and state cooperative banks registered under applicable cooperative laws;
   • (f) Government departments, statutory corporations, public sector undertakings, and agencies specifically notified by the State Government for developmental lending or financial inclusion programs.
3. (3) Notwithstanding the exemptions provided in sub-section (2), all provisions of this Act relating to prohibition of coercive recovery methods, borrower protection measures, and fair recovery practices shall apply to every entity mentioned in sub-section
4. (2) when they engage in recovery of loans from borrowers within the State of Bihar.