The petitioner had sought a direction to the RBI to regulate and fix the ceiling rate on lending by NBFCs, particularly Muthoot Finance and Manappuram Finance, which he alleged are engaged in pawn broking and charging an exorbitant interest of 39% to 40% from customers
Bangalore: The Karnataka High Court has directed the Reserve Bank of India (RBI) to furnish within six weeks all details of non banking finance companies (NBFCs) operating in the state and the names and number of private finance companies offering secured and unsecured loans, reports PTI.
The division bench, comprising acting Chief Justice K Sreedhar Rao and Justice BV Nagarathna, acting on public interest litigation (PIL) by one DM Suresh, also directed the RBI to give details about the secured and unsecured loans by NBFCs.
The court warned that the licences of these companies would be cancelled if they were found violating laws.
The petitioner had sought a direction to the RBI to regulate and fix the ceiling rate on lending by NBFCs, particularly Muthoot Finance and Manappuram Finance, which he alleged are engaged in pawn broking and charging an exorbitant interest of 39 to 40% from customers.
The petitioner contended that such companies were "fleecing" customers despite the state government fixing 14% as maximum lending rate for secured loans.
He also wanted the state Government to withdraw exemption certificates given to such companies under the Money Lending Act and for these two companies to be brought under the Pawn Brokers Act.
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