Money Lending License in Odisha

Money Lending License in Odisha

Odisha lies on the eastern coast of India and follows specific norms and regulations related to money lending licenses in Odisha. These money lending laws are so designed to safeguard the interest of lenders and borrowers and generate a fair and transparent money lending practice in the market. Money lending license in Odisha is important for individuals and entities to obtain the money lending license to engage in the lending business within the state. This law in Odisha, commonly known as the Odisha Money Lenders Act, is formulated to protect borrowers and ensure ethical practices are commenced within the industry (money lending license in Odisha). Take a closer view at key provisions of money lending license in Odisha as follows-

 Money Lending License in Odisha and its Regulations

Money lending licenses in Odisha are designed in a way to ensure that money lending activities are done in a systematic and responsible manner. The regulation covers a wide range of money lending aspects, which include the rate of interest on lending, licensing requirements and the borrower’s protection from illegal lending practices. Complying with the money lending license rules and regulations, lenders are more likely to safeguard their business interests and protect the borrower’s interest. The money lending license in Odisha aims to balance the financial needs of individual borrowers and to prevent them from unfair lending practices. The money lending license in Odisha is governed through the Odisha Money Lenders Act of 1939.

The legislation facilitates detailed guidelines that regulate the money-lending business in Odisha and recommends suitable rights and responsibilities for both lenders and borrowers. It is applicable to all domestic money lending license transactions and develops a detailed regulatory structure. It is mandatory for all money lenders in Odisha to get approval from the concerned authority before commencing their business as a money lender in the state.  The licensing process includes monitoring the financial stability and reputation and adhering to money lending rules and regulations. The money lending license in Odisha ensures the joining of reputable members or individuals or legal entities in money lending practice to mitigate the risk of unfair money lending practices. The law specifies the allowable rate of interest which money lenders can charge on loans. This is important to prevent and protect borrowers from excessive rates of interest, which can lead to a trap in debt.

The law is designed to secure a balance between the financial interests of lenders and the well-being of borrowers by creating standardized interest limits. Moreover, it is important under this law that moneylenders must provide a clear and written understanding of terms and conditions related to loan terms, such as rate of interest, repayment, and fees. In case of any lending dispute, the law facilitates arbitration or court proceedings to ensure fair and efficient measures to settle such disputes.

This guarantees borrowers with legal remedies in relation to complaints that arise from the loan relationship. It is important for money lenders to get approval from the concerned authorities to start the lending business. A money lending license in Odisha certifies the lenders have met the requisite money lending guidelines and are authorised to lend money. In order to get a money lending license in Odisha, one is required to submit an application, which we will discuss later in detail. The regulatory norms ensure that only the entry of reputable, legal and trustworthy lenders are operating in the Indian market and are more likely to protect the borrower’s interests.

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Process to Obtain a Money Lending License in Odisha

Securing a money lending license in Odisha, including a systematic process which is governed and regulated by the Odisha Money Lenders Act, 1939. Under this Act, the legal framework and regulatory requirements for entities and persons who wish to commence business as a money lender are defined accordingly. Obtaining a money lending license in Odisha involves a step-wise process which ensures an applicant must comply to secure such a license. Here is a detailed descriptive step-wise process-

  • Understanding the legal framework:

Prior to securing a money lending license in Odisha, it is most important to be aware of the regulatory framework outlined in the Odisha Money Lenders Act of 19391. This legislation ensures money lending regulations and binds applicants to undergo the provisions.

  • Eligibility conditions: 

The initial step to securing a money-lending license in Odisha starts with checking your eligibility. The Act confirms that a candidate must meet the specific criteria, which include financial stability and an understanding of the regulatory framework and standards. If an application is made, and the concerned authority finds the applicant’s past history of involvement in unethical business practices and financial abuse, then such an application may be rejected to get a money lending license in Odisha.

  • Submitting the request: 

As the eligibility for a money lending license in Odisha is confirmed, then the applicant is required to submit a formal loan application, which is available from the end of regulatory authority to look over the concern of a money lending license in Odisha and supervise it accordingly. It is necessary to fill out the application form, complete the information required in the form, and support your form with the required documents.

  • Necessary paperwork:  

Applicants must prepare documents to support the application for a money lending license in Odisha. The necessary paperwork includes identity proof, address proof of applicant, financial statement or bank statements, letter of recommendation of bearing good and moral character, business plan or target market. These documents need to be submitted before the concerned regulatory authority.

  • Background Check and Verification:

The regulatory authority that issues money lending licenses in Odisha initiates extensive background checks of applicants. The entire process includes the verification of the applicant’s financial status and history, checking references, and ensuring adherence to legal and ethical compliance. The purpose is to ensure the stability of applicants operating businesses as money lenders.

  • Payment of fee:

 Applicants seeking a money lending license in Odisha need to pay a requisite legal fee along with the application form. The fees cover the administrative costs and to process the application form. The amount may vary depending upon the local authority from region to region. It is recommended to check with the local authority for the applicable fee structure.

  • Grant or refusal of a permit:

 After the successful completion of regulatory inspection and verification, the regulatory authority comes to a conclusion about whether to grant a money lending license in Odisha or not. If the applicant meets all the requisite criteria as a suitable and stable lender, then a money lending license in Odisha is granted to the applicant. If any problem with the application form exists, then such an application might be rejected by the authorities.

  • Compliance with relevant regulations:

Money lending licenses in Odisha are subject to the rate of interest regulations, which are laid down in the Odisha Money Lenders Act. It is mandatory for licensees to be aware of the regulatory interest rate and adhere to a maximum rate of interest. Failing to comply with the norms of the money lending license in Odisha results in sanctions or even cancellation of the money lending license in Odisha.

Money lenders are required to follow fair money lending practices when dealing with potential borrowers. The law states that lenders provide a clear and understandable explanation of the terms and conditions of the loans, which includes the interest rate, repayment and related fees. Moreover, money lenders are likely to keep accurate records of financial transactions to meet regulatory compliance.

  • Renewal and Continued Compliance:
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A money lending license in Odisha is valid for a fixed period of time after it is required to be renewed. Money lending license holders in Odisha must comply with the statutory requirements, which include financial reporting, interest regulations and other specific provisions specified under the Money Lenders Act.

  • Cooperation with regulatory authorities:

 It is mandatory for money lenders to cooperate with the relevant authorities to conduct regular inspections and investigations. Lenders are expected to provide access to relevant documents and requisite information to streamline the inspection process and resolve the query raised by regulatory authorities in a timely manner.


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Requirements for Money Lending License in Odisha

As per the Money lending License in Odisha, all money lenders are required to operate with the requisite lending license from the appropriate authority. The requirement is important as it serves as a tool to identify legitimate lenders and protect them from lending fraud. Money lenders who have licenses must comply with the rules laid out by the concerned authority. Applicants, in order to secure a money lending license in Odisha, must apply the application form with requisite fees. The specific requirements laid by the government are just to ensure that only a qualified and reliable person or entity gets involved in the business of money lending. The listed below are the primary requirements to get a money lending license in Odisha-

Minimum capital requirements:

Applicants must ensure that a minimum capital requirement as specified by the regulatory authority. This gives the lenders adequate funds and capacity to commence business as money lenders to meet the regulatory obligations. 

Good character and reputation:

Applicants seeking a money lending license in Odisha must bear a good moral character, which means they must not be involved in any fraudulent or unethical practice. The law is inserted with the purpose of safeguarding the borrowers from fraudulent lenders and creating an environment of money lending.

Reliable financial capacity:

Under the Money Lenders Act, lenders are bound to demonstrate a good financial record to show their ability to manage and maintain loan transactions. It includes providing a financial statement, bank statement or any other documents to support their financial capacity.

Compliance with Applicable Laws:

It is mandatory for the applicant to comply or show the ability to comply with the applicable norms of money lending. The compliance includes with the interest rate limits, borrower protection, and other regulatory requirements imposed by relevant authorities.

The Rights and Responsibilities of Borrowers and Lenders

In Odisha, the rights and responsibilities of both borrowers and lenders are specified in the Odisha Money Lenders Act of 1939. This legislation is designed to govern the money lending activities and ensure fair and transparent lending transactions. Listed below are the rights and responsibilities of both parties-

Right to information:

Borrowers have the right to get a clear and detailed understanding of loan terms and conditions such as rate of interest, repayment schedules and fees.

Fair Treatment:

Borrowers are entitled to fair and equitable treatment during the loan process. They should not be subjected to inappropriate practices or harassment. 

3. Protection against exploitation:

The money lending law facilitates the maximum interest rates applicable for lending to protect and safeguard borrowers from unfair lending practices. The borrower is entitled to demand interest rates prescribed within the limits.

4. Repayment terms:

Borrowers are responsible for agreeing on loan terms and conditions, including the timely repayment of the principal amount and rate of interest applicable as per loan amount.

5. Redressal of Grievances:

In the case of money lending disputes between the borrowers and lenders, the borrowers have the right to seek remedies using appropriate dispute resolution channels. It may include a dispute resolution mechanism and a complaint-handling process.

The rights and Responsibilities of Lenders are as follows:

Right to debt recovery:

Lenders have the right to recover capital amount and interest as per the applicable terms and conditions mentioned in a loan agreement. Although this should be done within the regulatory framework and without complying with the rules, it will be declared as an illegal activity.

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 Adherence to Interest Limits:

Lenders must comply with the Odisha Money Lenders Act, and charging interest should not exceed the prescribed limits.

Fair and transparent practices:

Money lenders in Odisha are responsible for lending money in a fair, transparent manner. It is the duty of money lenders to provide clear and detailed information to borrowers regarding the terms and conditions of loans.

Proper Documentation:

Money lenders must provide accurate and complete records of all lending transactions, such as loan agreements, repayments and other terms or documents related to loans. It is mandatory to keep proper documentation to comply with the regulations.


It is mandatory for lenders not to discriminate against borrowers depending on diverse factors, including caste, religion or gender. Fair and non-discriminatory business practices must be maintained throughout the entire loan process.

6. Compliance with Licensing Requirements:

Money lenders must get approval for money lending business in Odisha in accordance with the Odisha Money Lenders Act. It is necessary to comply with the licensing authority and ensure a balance of rights and obligations in between the lenders and borrowers.


Securing a money lending license in Odisha is solely a regulated process in which an applicant is required to fulfil and adhere to specific laws established by the concerned authority. The state government intends to create a fair lending market to safeguard the interest of borrowers and enhance lending practices. Understanding the rules and norms of money lending can help lenders operate business with confidence while borrowers feel safe and facilitate transparent loan services in Odisha.


  1. What is a money lending license in Odisha, and why is it essential?

    A money lending license in Odisha is a legal authorization given by the state government which enables money lenders, including individuals or entities, to commence business in the lending landscape. It is important to get a money lending license in Odisha for lenders to operate businesses, comply with the regulatory norms, and conduct financial transactions within the regulatory framework.

  2. Who needs a money lending license in Odisha?

    Any individual, company, entity or organisation that engages in the business of money lending requires a money lending license in Odisha. It includes microfinance institutions, non-banking financial companies (NBFCs), and other entities engaged in money lending practice.

  3. How do I apply for a money lending license in Odisha?

    To get a money lending license in Odisha, the applicant is required to submit an application form to the relevant authority. His or her application form must be supported with other relevant documents, such as financial stability, business plan and compliance along with government fees. The application process may vary depending on region to region. Thus, it is advised to consult with an expert who will guide you through the step-by-step application process.

  4. What are the eligibility criteria for obtaining a money lending license?

    The eligibility to get a money lending license in Odisha includes various factors such as the applicant's financial stability, business plan, and adherence to regulatory lending practices. The concerned authority will also assess the applicant's stability and ensure the protection of the borrower's interest.

  5. What are the fees and charges associated with obtaining a money lending license?

    The fees to secure a money lending license in Odisha may vary depending upon diverse factors such as business types, operational scale, and the nature of financial services offered. It is suggested that you check with the regulatory authority for updated fees and charges.

  6. What are the responsibilities and obligations of a licensed money lender in Odisha?

    Money lenders holding licenses in Odisha are supposed to adhere to the norms of lending, commence transparent business dealing with borrowers, and comply with the regulatory norms and other specified rules. Lenders are bound to submit periodic reports and business updates to the relevant authorities and comply with the prescribed guidelines for debt recovery.

  7. Can a money lending license be revoked, and what leads to such actions?

    Yes, a money lending license in Odisha can be revoked if the licensee is unable to comply with the rules and regulations following unethical business practices or violates the terms and conditions of the license, which may result in the revocation of the license. Money lenders are supposed to operate business within the ambit of laws.

  8. How does having a money lending license benefit borrowers in Odisha?

    Money lending licenses in Odisha benefit borrowers by ensuring that the money lenders comply with the regulations and commence a fair and transparent lending business. It provides a level of confidence and assurance to fair lending practices, transparent terms and conditions, etc. Borrowers are encouraged by the relevant authority to check and verify the lending license of money lenders prior to engaging in an agreement.

  9. Are there any restrictions on interest rates imposed by the regulatory authorities?

    Yes, the regulatory authority imposes restrictions on the rate of interest duly charged by money lenders. It is mandatory for money lenders to be aware and comply with the rules and regulations of money lending as per laws in order to safeguard the interest of borrowers.

  10. Where can I find more information about money lending licenses in Odisha?

    You are advised to contact the experts to understand the relevant regulatory authority's detailed information on money lending licenses in Odisha. The experts will guide you on financial regulations and help you to stay at the forefront of regulatory development for compliance purposes.


  1. https://www.india.gov.in/money-lenders-act-1939-0

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