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The Union Cabinet today gave its approval for repealing of the Hire Purchase Act, 1972. A Bill to this effect will be introduced in the ensuing Session of Parliament.
The Hire Purchase Act, 1972 was enacted with the objective of protecting the interests of the hirer so that the lender may not charge exorbitant rates of interest. Although the Law Commission had suggested to the Government to specify the lower rate of interest, there is no mechanism with the Government yet to fix such a rate of interest. It is, therefore, felt that the rate of interest may be determined by the market conditions. The present economic scenario has undergone a sea change since the enactment of the Act, as loans from banks and financial institutions are available in the market now on terms and conditions, including low rate of interest, which suit the hirer. Hence the repeal of the Act will benefit the hirer.
HS: HK: LV
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