Justice To Usury Victims

The much-awaited law that criminalises loan-sharking is now in place with the approval of the Bill to amend some Nepal Acts related to Civil Code-2080 by the federal parliament. In Sunday's meeting of the House of Representatives, the lawmakers representing different political parties unanimously endorsed the Bill. The ratification of the Bill has opened the door for the government to indict the moneylenders charging unreasonably high interest rates from borrowers.  Earlier on Sunday, Minister for Law, Justice and Parliamentary Affairs Dhan Raj Gurung had tabled the Bill in the House of Representatives for its endorsement. Several weeks back, the Ministry had introduced it in the National Assembly for approval. It had remained in the House under consideration for long. As the major political parties represented in the parliament failed to forge a consensus to advance the process of sanctioning the Bill, the government had to issue an ordinance to have a law through fast track.

Following the inking of a deal with the agitating representatives of the loan-shark victims, the government was under pressure to proceed with its plan to formulate the law to deal with the problem of usury that has been widespread in most of the Terai districts. The Bill includes provisions to eliminate the unfair financial transactions and deliver justice to the victims of loan-sharking. According to the Bill, a seven-year jail sentence and up to Rs. 70,000 in fine will be slapped to anyone who is proved to be guilty. The Bill defines usury as an unfair transaction. It also outlaws the tradition of converting interest into loans, including the amount of money not given to the borrowers as a loan in the loan deed and avoiding giving receipts to them. It is remarkable that the Bill authorises the local governments to monitor all the exploitative forms of financial dealing. 

With the passage of the Bill, the National Penal (Code), National Criminal Procedure (Code), National Civil Code and National Civil Procedure have been amended. Once the law is implemented in an effective manner, this may also help abolish the faulty practice of usury from the country forever. Launching a financial literacy among vulnerable communities and increasing people's access to banking services are equally essential for rooting out such an evil practice.   A large number of usury victims had staged a series of protests to pile pressure on the government to formulate necessary laws to illegalise such unfair financial transactions. However, the ordinance had got annulled as the opposition parties disrupted the House proceedings on July 5 when the parliament was scheduled to pass the Bill. It was the 60th day the ordinance was issued. As per the law, any ordinance needs to be ratified by the parliament within 60 days from the date of its issuance for it to be a law. 

In the first week of April, the government formed a three-member probe commission that was assigned to collect complaints along with concrete evidences from the victims of usury. The team was also entrusted with the responsibility of trying to settle such cases on the basis of mutual understanding between the creditors and debtors. The Loan Shark Probe Commission has collected a total of 23,959 complaints from various districts. With the filing of 3,322 grievances, Bara has emerged as the worst-hit district in terms of loan-sharking. The commission has also got 2,920 complaints from Siraha, 2,615 from Dhanusha, 2,336 from Mahottari and 2,078 from Rautahat districts. As of now, the commission has been able to resolve around 1,400 cases through shared understanding between the two sides.