Money lending is a business where a person gives a loan and earns interest from it. In Bihar, this business cannot be done freely without the government’s permission. The government wants lending to be fair and safe for both the lender and the borrower. Therefore, anyone who wants to lend money at interest as a business must get a Money Lending License from the state authorities. This license makes the lending activity legal and gives the lender protection under the law.
What is a Money Lending License in Bihar?
A Money Lending License in Bihar is official approval from the government that allows a person to give loans and charge interest as a business. Without this license, lending money at interest becomes illegal in Bihar. With a license, the lender can also take legal steps if a borrower does not return the money. The license also gives trust to borrowers because they know they are dealing with a registered lender.
Why is a Money Lending License Needed in Bihar?
The license is needed for many reasons.
- It protects borrowers from unfair interest rates or bad recovery practices.
- It helps lenders avoid legal issues.
- It helps the government check lending and prevent cheating.
Who Needs a Money Lending License in Bihar?
In Bihar, a person needs a Money Lending License if:
- They want to lend money as a business
- They want to earn profit by charging interest
- They plan to give loans regularly
A person does not need a license if:
- They lend money to friends or relatives without interest
- They give money only occasionally and not as a business
- They do not earn a profit from lending
Is Money Lending Regulated by the Bihar Government?
Yes. Money lending in Bihar is controlled by the state. The rules show how to apply, what papers are needed, how to keep records, and how long the license lasts. Since lending affects many people, the government watches it to stop cheating.
Which government office issues the money lending license in Bihar?
In Bihar, the local revenue office gives the license. The Anchal Adhikari (Circle Officer) is the main officer for this work. You must submit the application to the office that covers your business area. In some districts, other officers may help with the process based on how the office works.
Benefits of Getting a Money Lending License in Bihar
A license gives many benefits to a money lender. It makes the lending business legal and gives the lender the right to recover money if someone does not pay. Borrowers also trust a lender more when the business is registered. The lender does not have to worry about legal problems because the work is done with permission. With a license, the business can grow more easily as people and the government see it as safe and proper.
Eligibility Requirements to Get a Money Lending License in Bihar
The rules for eligibility are simple. A person must:
- Be an adult
- Have a clear business address
- Have funds to lend
- Have good character
- Agree to follow lending rules
- Maintain proper records
If a person has done financial fraud or crime, they may not get the license.
What Documents Are Required to Apply for the License?
The list may differ by district, but common papers are:
- Identity proof (Aadhaar, PAN Card)
- Address proof
- Business address proof
- Passport-size photos
- Capital proof (bank statement, income proof, etc.)
- Filled application form (Form M.L. 2)
- Fee receipt for registration
In some cases, the officer may also ask how much money the person plans to earn in one year and in which area they will work.
How Many Branches Can a Money Lender Open?
A person can open more than one branch, but must mention all branch locations in the application form. The license will cover all listed branches. If new branches are added later, they must be updated with the authorities.
How to Apply for a Money Lending License in Bihar?
The process to apply is clear and simple. Here is a step-by-step guide:
1: Collect All Documents
collect ID proof, address proof, business address proof, and bank statements.
2: Get the Application Form
You need the official application form, known as Form M.L. 2. This form has fields like:
- Name of applicant
- Address
- Business location
- Loan amount plan
- Branch details
- Previous license details (if any)
3: Fill the Form Carefully
Fill the form with correct information. Wrong or incomplete details can delay approval.
4: Pay the registration fee for the license
The registration fee depends on how much money you plan to lend in one year. The fee is not very high and is fixed by state rules.
5: Submit the Form
Submit the form and documents to the Anchal Adhikari office. Keep photocopies and fee receipts for safety.
6: Verification by Officer
After submission, the officer verifies:
- Information in form
- Identity and address
- Capital details
- Business location
Sometimes, a field visit may be done to check the business address.
7: License approval
If everything is correct, the applicant gets a registration certificate. This certificate works as the Money Lending License.
How Long is the License Valid in Bihar?
The Money Lending License in Bihar is usually valid for five years from the date of approval. After five years, the lender must apply for renewal. Without renewal, lending becomes illegal again.
Renewal of Money Lending License in Bihar
Renewal is important. The steps for renewal are:
- Submit the renewal form
- Pay the renewal fee
- Submit updated documents (if required)
If renewal is late, there may be penalties.
Rules for interest rates in Bihar
Interest should not be too high. If a lender charges very high interest, the government can cancel the license or start legal action. The government can also fix maximum interest rates to protect borrowers.
Penalties for Lending Without a License
If a person lends without a license, the government may:
- Charge fines
- Stop the business
- Deny legal recovery rights
- Take action for the violation of the rules
In some cases, lending without a license can also lead to criminal charges.
Conclusion
To get a money lending license in Bihar, a person needs permission from the government. The process is easy collect papers, fill the form, pay the fee, and submit everything. A license protects borrowers from high interest and keeps lenders safe from legal problems. It also makes lending fair for both sides.
FAQ
Do I need a license to give loans in Bihar?
Yes. If you lend money with interest as a business, you must get licensed.
Who gives the Money Lending License in Bihar?
It is given by the Anchal Adhikari or other revenue officers, depending on the district.
How long does the license remain valid?
It usually remains valid for five years.
What happens if I lend without a license?
It is considered illegal and may lead to fines, cancellation of business, or legal action.
Can anyone start a money lending business in Bihar?
Yes. Any adult can apply for the license if they follow the rules set by the government.
Do I need a shop or office to get the license?
Yes, you need to show a business address. It can be a small shop, office, or working space.
Can I lend money to people outside Bihar with this license?
No. The license works only in the area you apply for. For other areas, you may need new permission.
Can the government check my loan records?
Yes, the officer can check loan records to make sure rules are followed, and no cheating is happening.
Can I charge any interest rate I want?
No, the interest rate must be fair. Overcharging can lead to penalties or the cancellation of a license.
How much time does it take to get the license?
The time depends on verification and local office workload. Some cases complete fast, others take longer.
