Transparency in rates of interest charged by Micro Finance Institutions or Money Lending Agencies or Organizations or Lender

(1) There shall be only four components in the pricing of the loan viz. the interest charge, the processing charge, the insurance premium and delayed penal payment. (2) There shall be a standard loan agreement as specified. (3) Micro Finance Institutions or Money Lending Agencies or Organizations or Lender shall provide the borrower a loan card reflecting.- (i) the effective rate of interest charged; (ii) all other terms and conditions attached to the loan; (iii) information which adequately identifies the borrower; and (iv) acknowledgements by the Micro Finance Institution (MFI) of all repayments including installments received and the final discharge; (v) all entries in the Loan Card shall be in Kannada. (4) The effective rate of interest charged by Micro Finance Institution (MFI) or Money Lending Agencies or Organizations or Lender shall be prominently displayed in all its offices and in the literature issued by it and on the website. (5) All borrowings by a borrower from Micro Finance Institutions (MFI) or the Money Lending Agencies or Organization or Lender shall be entered in the manner, wherein the process of sanction and disbursement of loans shall comply that,- (i) all communications to the borrower shall be in the kannada; (ii) Loan application forms shall include necessary information which may affect the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other Micro Finance Institutions (MFI) or Money Lending Agencies or Organization or Lender can be made and a proper decision can be taken by the borrower. The loan application form shall indicate the documents required to be submitted with the application form. (6) Every Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender shall keep and maintain a cash book, a ledger and such other books of account as may be specified. (7) Every Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender shall deliver or cause to be delivered, to the borrower within one day before the date on which a loan is made, a statement in the specified 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 Micro Finance Institution (MFI) or the Money Lending Agencies or Organization or Lender and the effective rate of interest charged; (8) Every Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender shall have a registered office in the local area. (9) No Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender shall receive any payment from a borrower on account of any loan without giving him/her a duly signed receipt for the payment. (10) A Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender shall, on a demand in writing by the borrower, supply a copy of any document relating to a loan obtained by him/her, 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. (11) Every Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender shall submit a quarterly Statement and annual statement to the Registering Authority before 10th day of ensuing quarter and financial year as the case may be, giving therein the list of borrowers, the loan given to each and the interest rate charged on the repayment made. (12) The Micro Finance Institution (MFI) or Money Lending Agencies or Organization or Lender who fails to submit the quarterly Statement and annual statement shall be punishable with imprisonment for period of six months or with fine which may extend to Rs. 10,000 or with both.