Settlement Of Usury Cases

Despite having no law in place to deal with the persistent problem related to loan-sharking in Nepal, the initiative taken by the federal government to this end appears to have started paying off. Following a series of protests staged by the victims of usury in various parts of the country, seeking justice, the government had formed a three-member Loan Shark Probe Commission under the convenorship of Gauri Bahadur Karki, a former Special Court judge, about three months back. No sooner had the government formed the investigation panel than it began collecting complaints from those being misused by loan sharks. Loan-sharking is a financial crime prevalent more extensively in the Terai districts than in other parts of the country. Under this lopsided financial transaction, a moneylender charges irrationally high rates of interest from debtors. Because of this, many borrowers are bound to lose all of their properties, including homes.  

As of now, the commission has collected as many as 23,948 complaints from different parts of the country. Of the total number of cases of usury filed, some 1,385 have so far been settled through mutual understanding between the loan sharks and the debtors. The database maintained by the commission shows that transactions worth Rs. 765 million were made between the lenders and debtors in different time periods. But while carrying out investigations into the 1,385 settled cases, the landlords have demanded Rs. 1.38 billion from the debtors as their amount to be recovered. Several other cases are in the process of being resolved on the basis of common understanding between the two sides. The probe team has received more complaints from the Terai districts than others. According to the commission, Bara has become the most usury-affected district, with the registration of 3,322 complaints. It has got 2,920 complaints from Siraha, 2,615 from Dhanusha, 2,336 from Mahottari and 2,078 from Rautahat districts. 

As per a news report published in this daily on Monday, the commission has held discussions with the concerned individuals on 3,339 cases. Of the total cleared complaints, the highest 249 cases were settled in Sarlahi district.  However, 22 districts that have not reported even a single complaint related to loan-sharking include Taplejung, Tehrathum, Dhankuta, Solukhumbu, Rasuwa, Manang, Mustang, Myagdi, Palpa, Gulmi, Rukum (East), Rukum (West), Dolpa, Humla, Mugu, Bajura, Bajhang, Dailekh, Darchula, Achham, Baitadi and Doti. In order to settle the complaints, the probe panel has already set up a coordination/facilitation committee led by Chief District Officer and a four-member special support taskforce led by Assistant Chief District Officer in each district. The support taskforce comprises police officers from the District Police Office, District Attorney Officer as members, and a non-gazetted officer as member secretary.  

With those two units, the commission aims to help facilitate and resolve the cases of loan sharks through mutual understanding. However, the commission wants to forward the unsettled complaints to the concerned government attorney offices for legal action. This shows that the commission has given high priority to mutual reconciliation for settling the cases.  The poor and other low-income people are forced to get loans from the landlords to maintain their expenses because of lack of proper financial literacy and access to banks and other financial institutions for loans. Moneylenders are found preparing a transaction/loan deed and getting the debtors signed the document to ensure its legal validity. As the usury has become a major problem in the country, the federal government is planning to get the parliament endorse a bill in order to handle the issue of loan-sharking for once and for all.