A SIMPLE GUIDE TO MONEY LENDING IN INDIA

1. INTRODUCTION

Money lending has been practiced in India since ancient times. Today, it has evolved into a more organized and secure system, adapting to modern technology and regulations. Let’s look at how money lending has changed over the years in India and where it stands today. Check here for licensed money lender Singapore

2. MONEY LENDING DURING BRITISH RULE

When the British arrived in India, they introduced a more formal banking system. The Union Bank of Calcutta, India’s first bank, was established during this period. In 1885, Allahabad Bank was founded and still operates today. The Swadeshi movement in the early 1900s led to the creation of many Indian banks, including the Punjab National Bank in 1894.

3. MONEY LENDING AFTER INDEPENDENCE

Following independence, Indian banking went through significant changes. The partition in 1947 impacted banks severely, especially in Punjab and West Bengal. To stabilize the economy, the government created the Reserve Bank of India (RBI), which took on a central role in regulating money lending. In 1949, the Banking Regulation Act allowed the RBI to control interest rates and establish banking rules.

During the 1991 economic crisis, India pledged 46.91 tons of gold to the Bank of England to secure foreign loans. The RBI’s actions helped India integrate into the global economy and stabilize its currency.

4. THE IMPACT OF GLOBALIZATION ON MONEY LENDING

With globalization, Indian banking entered a new era. Private banks like ICICI, HDFC, and IndusInd emerged, offering competitive interest rates and modern services. Technological advances made it possible for people to apply for loans online, making banking more convenient. Credit cards became widely available, introducing the concept of “buy now, pay later” with low interest rates.

5. MODERN MONEY LENDING TOOLS

Today, people can access loans digitally through the internet and mobile banking, without needing to visit a bank in person. Terms like credit scores have become familiar, and electronic transactions have become the norm. Banks compete by providing quick and easy online applications, competitive interest rates, and flexible repayment options.

6.AI POWERED LOANDS AND INSTANT CASH OPTIONS

Artificial intelligence (AI) has further changed the lending landscape, with new apps providing instant cash loans at low monthly interest rates (1.08–2.03%). These apps analyze applicants’ financial profiles using AI to assess their ability to repay. Short-term loans, often lasting less than 180 days, are prevalent and range in size from INR 3,000 to INR 5 lakh.

7. PEER TO PEER LENDING

With P2P businesses serving as middlemen, P2P lending enables direct communication between lenders and borrowers.

Borrowers must meet credit requirements, and lenders can diversify their investments to reduce risk. While these loans have a 36-month repayment limit, P2P lending provides more flexible options for individuals who may not qualify for traditional bank loans.

8. CONCLUSION

Money lending has been a significant part of India’s economic history and continues to play a crucial role. From ancient scripts to AI-powered instant loans, the journey of lending in India reflects the country’s adaptation to changing times. With both traditional and innovative options, money lending is now more accessible, regulated, and secure for everyone.