A microfinance company in Thoothukudi charged me excessive interest, is that legal?
CH Asked by Charu Singhal from India
Quick Answer
Microfinance institutions are governed by RBI guidelines and Tamil Nadu Rent Control Act 1960 regarding fair interest rates and transparency.
Detailed Legal Analysis
Microfinance institutions are governed by RBI guidelines and Tamil Nadu Rent Control Act 1960 regarding fair interest rates and transparency. The Madras High Court has held that charging usurious interest rates is an unfair trade practice.
In Thoothukudi, you can challenge the interest rate before the consumer commission and the RBI ombudsman. The Madras High Court has directed microfinance lenders to disclose all charges clearly and avoid coercive recovery.
Under Tamil Nadu Rent Control Act 1960, 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 Thoothukudi.
Disclaimer: AI-generated for educational purposes only. Does not constitute legal advice. Consult a qualified practitioner.