Understanding Lenden Kanoon: Borrowing and Lending Laws in Nepal
Lenden Kanoon, or Transaction Law, in Nepal, is guided by the Muluki Civil Code 2074. It governs borrowing and lending practices in both formal and informal systems. Formal transactions require legally executed deeds, including details of involved parties, loan terms, repayment schedules, and interest rates, capped at 10% annually. Informal transactions, often based on trust, are prevalent in rural areas. The law prohibits compound interest and mandates proper procedures for repayment documentation. Non-compliance, such as transactions without deeds or excessive interest, can lead to legal disputes. Understanding these laws is crucial for transparent and enforceable financial dealings in Nepal.
