A microfinance company in Srinagar charged me excessive interest, is that legal?

Microfinance institutions are governed by RBI guidelines and Jammu and Kashmir Rent Control Act 1966 regarding fair interest rates and transparency. The Jammu and Kashmir High Court has held that charging usurious interest rates is an unfair trade practice.

In Srinagar, you can challenge the interest rate before the consumer commission and the RBI ombudsman. The Jammu and Kashmir High Court has directed microfinance lenders to disclose all charges clearly and avoid coercive recovery.

Under Jammu and Kashmir Rent Control Act 1966, 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 Srinagar.