The Banning of Unregulated Lending Activities (BULA) Bill aims to combat unregulated lending practices and protect borrowers from unauthorized lenders. Here are the main points:

Definition: Unregulated lending includes loans offered outside existing regulations, such as those from unauthorized digital lending platforms.

Penalties: Unauthorized lenders face severe penalties, including prison sentences of up to seven years and fines between Rs 2 lakh and Rs 1 crore. Coercive recovery methods result in even harsher penalties.

Investigation: The Central Bureau of Investigation (CBI) will handle investigations involving large sums or multi-state issues.

Exemptions: Loans to relatives are exempt from this ban.

Concerns: The bill addresses rising concerns over fraudulent lending practices, aggressive recovery methods, and exorbitant interest rates.

Government Actions: The government has removed over 2,200 dubious loan apps from Google Play Store between September 2022 and August 2023.

Suggestions for Improvement: Legal experts suggest creating a public database of authorized lenders, securing systems to prevent record tampering, establishing a reporting portal for fraudulent activities, and launching financial literacy campaigns.

Feedback: Stakeholders have until February 13, 2025, to provide feedback on the draft bill.

The bill aims to curb harmful lending practices and promote transparency in the lending landscape.