‘Bill obstruction won’t dent initiative to give justice to loan-shark victims’

By Nayak Paudel,Kathmandu, July 7: With the obstruction of the House session by the CPN-UML on Wednesday, the passage of the bill on loan sharks also got obstructed. 

The bill had to be endorsed by Wednesday midnight to replace the ordinance on the same. 

However, Deputy Prime Minister and Minister for Home Affairs Narayan Kaji Shrestha and the officials of the Commission for the Investigation of Loan Sharking (CILS) have said that failure of the bill would not affect the initiation taken to give justice to the victims. 

The CILS was formed by the government on April 3.  

They also dismissed the speculations that the inability to endorse the bill would scrap the commission. 

As published in the Nepal Gazette on April 17, the three-member Commission was formed to investigate the cases of loan sharking under Section 3(2) of the Commissions of Inquiry Act, 2026 (1969).

“The commission has not been formed under the ordinance but under a separate and independent act. It is why the obstruction of the ordinance will not affect us,” Gauri Bahadur Karki, chairman of the CILS, told The Rising Nepal.

The government had issued the ordinance related to the amendments to the acts related to the Criminal Code, and it was published in the Nepal Gazette on May 3, criminalising unscrupulous lending. On May 7, the government tabled the ordinance in the House of Representatives.

As per the prevailing laws, an ordinance should be passed within 60 days of the House session. The deadline was on Wednesday.

“The commission is still active even if the ordinance is not. Moreover, nothing much has changed. We can still punish criminals for unscrupulous lending and ensure justice for the victims,” said Chairman Karki, who is also a former chairman of the Special Court.

What did the ordinance have?

The ordinance penalised unscrupulous lending, forging agreements (tamasuk), demanding more money than the agreed amount or threatening the borrower, among others.

It provisioned imprisonment of up to seven years and a fine of up to Rs. 70,000 for the violators. 

The amendment also states the need to register an agreement of personal lending of over Rs. 100,000 at the respective ward office with a witness from both sides. 

Similarly, the local government has also been given authority to investigate the property of the lender and receiver and transactions between the two parties in the future. The public has also been requested to register any such agreement made after the National Criminal Code, 2017, came into effect at the ward offices within six months of the ordinance coming into effect.

What has been done till now?

The Commission had called the victims of loan sharking to lodge a complaint at the respective district administration offices (DAO) from April 30 to May 28. They had received around 24,000 complaints from 67 districts.

“The commission had received 18,021 complaints from the eight districts of Madhes Province alone, with majority of complaints (3,322) from Bara. Similarly, 1,889 complaints were registered in West Nawalparasi,” reads a progress report of the CILS as of July 4.

The CILS informed that the respective district-level task forces solved 1,270 cases as of Tuesday (July 4). A task force led by the respective district’s assistant chief district officer and comprising representatives from Nepal Police, District Attorney’s Office, and other government officials as per the need has been formed in every DAO where a complaint against loan sharking is registered.

“The process of solving the cases showed us that borrowers had to sign agreements where the lender demanded more,” said Karki. While the prevailing law allows personal lending at a maximum interest rate of 10 per cent per annum, loan sharks are found charging up to 36 per cent per annum.

“In the solved 1270 cases, victims were found to have borrowed Rs. 98,769,150 from the lenders. However, the loan sharks demanded Rs. 264,881,478. The agreements were reached where the victims would now return Rs. 126,840,742 only,” read the progress report. Likewise, 30 plots of land were returned to victims. 

Bill’s scrapping will have no effect

Speaking with the journalists at Chitwan-based Bharatpur Airport on Thursday, Deputy Prime Minister (DPM) Shrestha said, “Even when the bill was not endorsed, the government will provide justice to the victims.”

DPM Shrestha added, “The bill should have been endorsed because it was for the benefit of the poor. However, loan sharks cannot continue their tyranny because the government was keen to provide justice for the victims.”

Similarly, CILS chairman Karki stressed that the Commission and district task forces are in favour of giving justice to all. “We will make sure that a borrower does not pay more and a lender receives his/her money,” he added.However, the CILS has urged the district task forces to continue their work without being affected by the current situation.

“The majority of the complaints are from Madhes. The majority of the victims are poor and uneducated. They might have been worried after hearing that the bill against loan sharking was not endorsed. They should be assured that justice will still prevail,” Uttam Raj Subedi, a member of the commission, told The Rising Nepal.

Subedi, who is a retired Additional Inspector General of Police (AIGP), said that the victims of loan sharking have seen a ray of hope through the government’s step against loan sharking and it should not be tampered with.

“Some loan sharks might use the bill’s scrapping for their benefit, but it will not be easy. It is because they cannot levy exorbitant amounts by cheating, threatening or forging agreements under other prevailing laws as well,” said Karki.