Money Lender's License
A money lender is someone who lends small amounts of money at a higher rate of interest. The reason for charging higher rates of interest is that the money lender faces a higher risk of default than normal banks due to various reasons. People who are desperately in need of money but at the same time do not have a bank account, people with bad credit histories and those who can’t get money from friends or relatives approach a money lender for credit facilities. In India, money lenders are governed by the Money Lenders Act in different states. The Tamil Nadu Government controls the money lending process in accordance with the Money Lenders Act, 1957. It is mandatory for every money lender to have a license. In this article, we look at the procedure for obtaining money lender license.
Required documents
- Photo
- Residence proof
- Solvency Certificate of the Applicant
- Shop Address Proof
- Property Document Proof or Patta or Chitta
- Previous Licence
- Challan
- Form A
- Building Licence document
- Building Blue Print
- PAN Card
- Self-Declaration of Applicant
- Lease Agreement
- IT Return document
Factors to issue a license
Money lender license is usually granted by the Revenue Department within 3 to 4 months from the date of submission of the application form. Once the application is received, it is valid for one year. However, there are a few factors that have to be taken into consideration while issuing/renewal/endorsement of a license:
- Whether the person has the competency to run a money lending business.
- Whether the applicant’s premise is an apt place to run the business.
- Whether granting the permission would be against the public interest.
