Book The Loan Sharks

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As the practice of lending money at unfairly high interest rates has continued to take its toll on many poor people, the federal government has now decided to advance the process of amending the Criminal (Code) Act, 2017 to criminalise the act of usury. The problem seems to have been widespread in the Terai region for years. However, the wretched people living in the hilly and mountainous regions have also not been free from this practice. A large number of victims had been raising their voice against the loan sharking since long. But no concrete measures were taken to deal with this issue. Last week, several people reportedly victimised by this illegal act arrived in Kathmandu by walking on foot for 11 days from numerous Terai districts to stage protests against usury. They have intended to draw the attention of the government towards their plight. They do not get justice even from the courts of law as the latter consider the loan deed as evidence as per the existing law.  

The agitating loan shark victims appear to be determined to return home only after the new laws are formulated and published in Nepal Gazette. They have demanded the scrapping of the loan deed system and harsh action against the loan sharks. The previous government had formed a committee to look into this problem and recommend necessary measures to tackle it. But the panel failed to come up with any effective step to address this complex issue. Realising that the problem could not be addressed permanently without having necessary laws, a meeting of the Council of Ministers held at the official residence of Prime Minister Pushpa Kamal Dahal Prachanda on Tuesday evening took a decision to advance the process of formulating laws in regard to loan sharks. The meeting termed usury as a crime and decided to take necessary action against the perpetrators after the adoption of laws. This is surely an important step towards bringing the loan sharks to justice. 

After the meeting, Minister for Communication and Information Technology Rekha Sharma said that the government had decided to take the act of usury as a crime and laws would be in place to manage the problem. A lot of people, especially from the poor and underprivileged communities, have suffered from this form of economic exploitation. To recover the debts along with interests, the loan sharks are often found resorting to violence against the debtors.  With an alarming increase in principal due to meteoric rise in interest on loans, many debtors in several Terai districts are reported to have been going through a difficult situation after having lost their lands and homes to the local traditional creditors. As this problem requires an urgent solution, the government has shown its determination to settle it in an organised way. 

The government on Tuesday formed a dialogue committee to hold talks with the victims of usury. Coordinated by Joint Secretary Rudra Devi Sharma of the Ministry of Home Affairs (MoHA), the committee includes three other members. The MoHA has so far received as many as 3,351 complaints against the loan sharks from across the nation. Some 525 complaints have to be looked into by the district courts. The police administration has settled about 850 cases of usury under mutual understanding. Some 1,181 complaints are now under investigation and 744 complaints are in the process of being probed. Only 35 cases have been resolved as of now.

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