Money lending at high rate of interest without licence

Alamelu (Querist) 28 January 2013 This query is : Resolved
Hello,

I would like to know if it is legal to lend money at high rate of interest (say 2 or 3% per month, i.e., 24 to 36% p.a.), even among friend and relatives.

In such a case, is there a way the borrower can be protected ?

I shall be grateful for your views in the matter.

Thanks
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ajay sethi (Expert) 28 January 2013
you need moneylender license . if you advance money at 3%per annum and borrower refuses to pay lender wont be able to recover money unless he has a money lender license . before taking money have the terms vetted by a lawyer

Alamelu (Querist) 28 January 2013
Thank you for your response.

In fact, my friend has borrowed and has been suffering in view of high rate of interest that has been paid. The lender has sued him in civil court. My friend has incurred huge loss in business and unable to pay back. He has paid the lender over 200% by way of Interest @ 3% per month.

Does my friend have a chance in this case ?

ajay sethi (Expert) 28 January 2013
contact a local lawyer . only after going through the suit filed by Plaintiff can we suggest possible defences . do cross check whether plaintiff has money lender license or not .