CB warning against moneylenders

The Central Bank (CB) on Friday issued a public warning against moneylenders saying it has received many complaints pertaining to these individuals or entities, and adding that a new law is being drafted to deal with moneylenders.

“As per the existing legal framework, moneylenders do not come under a licensing and regulatory regime, unless they accept deposits. Therefore, the CB with the Ministry of Finance has taken action to draft a law for licensing, regulation and supervision of moneylenders and protection of customers. The said law is currently in the drafting process and is expected to be enacted in the near future,” it said.

The CB statement said:

“The CB has observed that advertisements and other forms of communications are made through various channels, including print, electronic and digital media, offering loans. Complaints have been made on certain irregularities in this regard. There are some allegations regarding scams, while some are complaining of high interest rates, harassment to customers and misusing of confidential customer information by such moneylenders. A moneylender could be described as a person who carries on or advertises or announces himself or holds himself out in any way as a lender of money on interest, with or without security.

“The public is advised to exercise due diligence and care to avoid becoming victims of the scams operating in the guise of moneylending businesses. The public should obtain full information before entering into an agreement for a financial transaction. Further, it is advised to rely on regulated entities when entering in to financial transactions.”