Usury ordinance expires, replacement bill ‘may proceed’Owing to obstruction by opposition parties including UML and delay in presenting a replacement bill in the House, the ordinance expired on Wednesday.
The ruling parties have decided to introduce a bill to rein in loan sharking after the ordinance issued to protect the victims expired on Wednesday. The legislation failed to be replaced by a bill owing to parliamentary obstruction by opposition parties including the CPN-UML.
The development, according to observers, shows how Nepal’s political parties—the ruling and opposition alike—do not work seriously on the problems that affect large numbers of people. The government had waited till the last day to table a replacement bill in the House. According to the constitution, any ordinance not adopted by Parliament within 60 days of the commencement of the House session loses effect. The replacement bill was endorsed by the National Assembly on June 30.
With the main opposition UML’s obstruction, the ordinance brought to control loan sharks could not be tabled in the House of Representatives on Wednesday, which was the last day to do so, leading to its annulment.
Government spokesperson Rekha Sharma, however, said discussions among the coalition partners are still inconclusive on whether to come up with the same replacement bill with some changes or to formulate a completely new bill.
“But one thing is sure: it will take longer to pass the bill following the parliamentary procedure, which is unfortunate,” Sharma told the Post.
Now the government has to present a bill through a regular process and the ruling parties have decided to draft a new one based on the ordinance.
The replacement bill is on the tentative agenda for the House meeting. Law Minister Dhan Raj Gurung is likely to table it in the House for deliberation. Parliament Secretariat officials said the replacement bill was in Parliament's consideration as it had been passed by the National Assembly.
"The ordinance has been void, but the constitution is silent on the fate of the replacement bill. Parliament will decide it as lawmaking is its prerogative," said Ekram Giri, spokesperson for the secretariat.
The problem caused by loan sharks came to the fore only after a large number of victims flocked to the Capital demanding action against the exploiters.
A meeting of major ruling parties on Thursday morning decided to work on the bill to curb the exorbitant lending practices following a regular process after the annulment of the replacement bill.
“Loan sharks are now happy with the ordinance becoming void,” said lawmaker Rajendra Pandey, vice-chairman of the CPN (Unified Socialist). “Now we are discussing a new bill for the regular process. There is no dispute among the ruling coalition on this.”
However, Upendra Yadav, chairman of the Janata Samajbadi Party, one of the major coalition partners, says there were some issues in the ordinance as “it terms all [financial] transactions as loan sharking”.
The ordinance was issued with a provision to amend the country’s Criminal Code to criminalise financial transactions with higher than normal interest rates.
Article 114 of the constitution states that an ordinance must be tabled in both chambers of the federal parliament in the season following its promulgation. If not passed by both the houses, it ipso facto ceases to be effective. If an ordinance is issued when Parliament is not in session, it must be passed by the legislature within 60 days after the day on which their joint meeting is held.
In April first week, the government formed a three-member inquiry commission led by former chair of Special Court Gauri Bahadur Karki to resolve the problems of loan shark victims in line with the ordinance.
The Karki commission including former assistant inspector general of Nepal Police Uttam Bahadur Subedi and former deputy attorney general Ganesh Babu Aryal as members has been working to resolve issues.
The commission’s term expires on July 10, but its works will not be affected by the annulment of the ordinance.
“We have resolved 1,321 among around 24,000 complaints through mediation,” said Karki. “Now we suggest the government allow the chief district officers to conduct the mediation for the next two years to resolve the remaining complaints while sending those unresolved to the court.”
According to Karki, loan sharking was a serious problem in the eight Tarai districts of Madhesh and West Nawalparasi. From these districts around 20,000 complaints were received. Some cases are said to be complicated due to the involvement of political leaders.
In the first week of May, the government forwarded the Ordinance to Amend Some Nepal Acts Related to the Civil Code to take action against loan sharks to President Ram Chandra Paudel, who issued it.
The ordinance would effect amendments to the Criminal Code, Criminal Procedure Code, Civil Code, and Civil Procedure Code.
Janata Samajbadi chair Yadav told the leaders during the meeting of the ruling coalition that laws cannot have retrospective effect and not all financial transactions should be deemed loan sharking.
According to leaders present at the meeting, Yadav said the new bill should be prepared to address those issues.