Centre Proposes BULA Bill to Curb Unregulated Lending with Strict Punishments

The Central Government has introduced the draft Banning of Unregulated Lending Activities (BULA) Bill, aiming to eliminate unauthorized lending practices and safeguard borrowers.

Violators could face imprisonment of up to 10 years and fines up to ₹1 crore. The bill defines "unregulated lending activities" as lending conducted outside the ambit of laws governing regulated lending, whether digitally or otherwise.

Key proposals include banning unauthorized persons or entities from lending, empowering the CBI to investigate cases involving multiple states or large-scale fraud and penalizing coercive recovery practices. Stakeholders can submit feedback until February 13, 2025.

This follows government efforts, such as Google removing 2,200 fraudulent loan apps, to address borrower exploitation and loan-related harassment.