Usury probe panel receives more than 21,000 complaintsMost were registered in nine Tarai districts, with only a few complaints lodged in hill districts.
The inquiry commission formed to resolve the problems of loan shark victims has received more than 21,000 complaints from 67 districts, with victims largely concentrated in nine Tarai districts.
After the loan shark victims protested in Kathmandu for several days demanding justice, the government in early April had formed a commission headed by former chairperson of the Special Court, Gauri Bahadur Karki.
The inquiry commission, which is stationed at Janakpur, the headquarter of Madhesh province, had collected complaints from the victims by setting up a desk at each District Administration Office. The extended deadline for filing complaints expired on May 21.
“We received a total of 21,500 complaints,” said Karki, coordinator of the commission, adding that the victims are largely concentrated in the eight districts of Madhesh province and Nawalparasi (West) of Lumbini province.
The commission received as many as 17,800 complaints from eight districts of Madhesh—Bara, Dhanusha, Mahottari, Parsa, Rautahat, Saptari, Sarlahi and Siraha. Bara reported the highest number of complaints (3,322), according to the commission.
From Lumbini province, Nawalparasi (West) registered 1,889 complaints. Even though complaints have also been registered in hill districts, the numbers are “very low”, according to the commission. “For example, a single complaint has been received in Okhaldhunga, Sankhuwasabha, Terhathum and Bhojpur each,” said Karki.
The commission is now making entries of those complaints in its database. As the first step, the commission plans to bring together the alleged loan sharks and the victims and seek a solution through understanding between the two sides.
For this, a taskforce has been formed under the supervision of the assistant chief district officer in each district where the complaints have been registered, according to Karki. The task force also includes a police inspector and assistant district attorney.
“The task force is mandated to settle the issue of loan sharking through negotiations where the victim has to pay back the loan along with its justifiable interest,” said Karki. “If the alleged loan shark has already received more than what the law allows and has also seized the property, it should be returned to the victim.”
The taskforce in Bara that received the highest number of complaints, is also preparing to invite both sides in order to settle disputes. “We will start inviting them in the next few days,” said Krishna Prasad Acharya, assistant chief district officer in Bara who is leading the taskforce. “If a dispute can be settled amicably, why make it a big court case?”
He said that the taskforce would encourage settlement of disputes through the payment of the exact loan amount and an interest rate which is not more than what the banks charge. “Otherwise, the issue should be settled through a legal process, based on an ordinance issued in early May,” Acharya said.
The ordinance, which was introduced on May 3, has criminalised loan sharking. It defines loan-sharking activities and specifies penalties to be imposed on the perpetrators.
The ordinance defines loan sharking as activities like making victims sign a promissory note without any money being lent, mentioning higher amounts in the documents than what was actually lent, and preparing a promissory note by adding interest to the principal before lending.
Likewise, other activities defined as loan sharking include not providing the receipt for the amount paid by the borrowers, threatening borrowers, exploiting them and seizing their properties based on inappropriate lending terms.
The ordinance also has a provision of jailing loan sharks for up to seven years along with a fine that can go as high as Rs70,000.
As per the ordinance, if a loan shark has confiscated cash or property of the borrower, equivalent cash or property should be returned to the borrower. “If it is proved that the ownership of fixed assets of the borrower has been transferred in the name of a person nominated by the loan shark, such transfer becomes null and void,” says the ordinance.
The ordinance has also amended the National Criminal Procedure (Code) Act-2017 to include a provision for prosecuting loan sharks under the anti-money laundering law.
Despite the formation of an inquiry commission and introduction of the ordinance, victims have continued their sit-ins at Kathmandu’s Ratnapark for the past two months. “We are still protesting as we want to continue to build pressure on the government,” said Awadhesh Kushwaha, coordinator of the Farmers-Workers Struggle Committee against Loan Sharking and Frauds.
He said the victims are asking for a justified settlement of their issues given that there are many whose loans have not been cleared despite paying multiple times more than what they actually received. He also commented on the efforts being made by the inquiry commission to settle disputes outside the courtroom, terming it a good decision.
“The question, however, is how the commission determines whether the documents [promissory notes] presented by money lenders are real or fake, as they make different documents,” said Kushwaha. “How will it deal with a case where the loan shark has already seized the property of the victim through a court verdict that was based on a fake document?”