Statement of Objects and Reasons

STATEMENT OF OBJECTS AND REASONS FOR ACT 26 OF 1970: There are large number of money-lenders in this Union Territory who lend money to the public at exhorbitant rates of interest. It has therefore become necessary to control and regulate the business of money-lenders by introducing the system of licensing. The Puducherry Pawn Brokers’ Act, 1966 (Act 11 of 1966) has already been passed in this Union territory to regulate and control the business of the Pawn Brokers who give loans after obtaining security from the borrowers. But there is no such law in respect of the business of the money-lenders who give loans without any security. The present bill which has been prepared on the model of the Madras Moneylenders’ Act, 1957 (Act XXVI of 1957) seeks to achieve this object.

STATEMENT OF OBJECTS AND REASONS FOR ACT 7 OF 1983: The Puducherry Money Lenders Act, 1970 (Act No.26 of 1970) was enacted on the same lines as the Tamil Nadu Money Lenders Act, 1957. In the course of implementation of their Act, the Tamil Nadu Government encountered some difficulties in the successful implementation of the Act and made amendments to their Act. As the Puducherry Money Lenders Act, 1970 is also on the same lines, it has been felt necessary to make similar amendments to this Act also for example in clause (i) of section 2 of the Act, the term ‘bank” has not included in the nationalised banks and subsidiary banks and hence it is proposed to include the said banks also in the definition of that term. It is also proposed to amend item (vi) of clause (6) of section 2 which excludes from the scope of the Act, advances made on the basis of negotiable instruments exceeding Rs. 3,000, so as to enhance the monetary limit from Rs. 3,000 to Rs. 10,000. It is also proposed to insert a new item providing for exemption in respect of advances made by any company or corporation owned or controlled by the Central Government or any State Government. It has also been felt necessary to amend section 7 (1) of the Act so as to empower the Government to fix and revise the rates of interest from time to time by notification. Similarly, some other consequential amendments have also been proposed wherever necessary.

STATEMENT OF OBJECTS AND REASONS FOR ACT 7 OF 2004: The Puducherry Money Lenders Act, 1970 has been brought into force in this Union Territory with effect from 1-10-1970. After such extension, lesser rate of licence fee and fine amount were prevailing in this Union Territory. Since the rates fixed in this regard were not enhanced from time to time, the revenue to the exchequer was very low and in order to augment more revenue to the exchequer, the licence fee and the renewal fee are proposed to be enhanced from rupees 35 and rupees 25 respectively to Rs. 150 each with the ceiling limit of Rs. 500 for granting licence and its renewal. It is also proposed to provide for compounding of offences under the said Act so as to quicken process of justice. The Bill seeks to achieve the above objects.