A microfinance company in New Delhi charged me excessive interest, is that legal?
VE Asked by Veena Shastri from India
Quick Answer
Microfinance institutions are governed by RBI guidelines and Delhi Rent Control Act 1958 regarding fair interest rates and transparency.
Detailed Legal Analysis
Microfinance institutions are governed by RBI guidelines and Delhi Rent Control Act 1958 regarding fair interest rates and transparency. The Delhi High Court has held that charging usurious interest rates is an unfair trade practice.
In New Delhi, you can challenge the interest rate before the consumer commission and the RBI ombudsman. The Delhi High Court has directed microfinance lenders to disclose all charges clearly and avoid coercive recovery.
Under Delhi Rent Control Act 1958, the commission can order a reduction in interest and refund of excess collected. You should request a detailed statement of account and the loan agreement before filing in New Delhi.
Disclaimer: AI-generated for educational purposes only. Does not constitute legal advice. Consult a qualified practitioner.