Bill criminalising usurious lending passes lower houseIt replaces a similar ordinance that expired on July 5.
The House of Representatives on Sunday unanimously endorsed the bill aimed at taking action against loan sharks.
Although 14 cross-party lawmakers had registered several amendments to the bill that revises the civil code, they withdrew their proposals after Minister for Law, Justice and Parliamentary Affairs Dhanraj Gurung agreed to incorporate some of their concerns in the bill.
The bill will now be sent to the National Assembly, where it originated. It will be sent to the President's Office for authentication once the upper house endorses the amendments from the lower house. "Today the House of Representatives has endorsed the bill related to taking action against loan sharks. This Act will set a strong foundation to the campaign for providing justice to the victims of loan sharking. Congratulations to everyone," Deputy Prime Minister Narayan Kaji Shrestha, who also is in charge of the home ministry, wrote on Twitter on Sunday night.
Following a series of protests from the victims, the government on May 3 had issued an ordinance criminalising usurious lending and to provide justice to the victimised borrowers. An inquiry commission led by Gauri Bahadur Karki was set up to collect complaints from the victims and study them based on the ordinance. The replacement bill to the ordinance must have been endorsed from Parliament by July 5. However, as the opposition parties obstructed the House proceeding on the day against a controversial statement made by Prime Minister Pushpa Kamal Dahal at a book launch event three days earlier, the replacement bill couldn't be endorsed.
The expiry of the ordinance and the Parliament’s failure to pass the replacement bill caused a legal vacuum in the investigations. The endorsement of the bill is a step forward towards filling the gap. "There is a legal vacuum in providing justice to the loan sharking victims. This bill needs to be endorsed to make sure justice is delivered," said Gurung while tabling the bill for endorsement.
The new law will come into force with an immediate effect once it receives the presidential seal. The bill criminalises the practice of lending money for interest through unfair transactions. The bill terms forcible transfer of the debtor’s immovable property through the use of any kind of threat or violence or exploitation for the purpose of debt recovery as an unfair transaction. Charging exorbitant interest to the extent that the interest exceeds the principal amount is punishable as per the bill. It has a provision that individuals who conduct transactions against the rules can face imprisonment for up to seven years and a fine of up to Rs70,000.
Other punishable offences involve not providing receipts for the amounts paid by the borrowers, threatening and exploiting borrowers, and unlawfully seizing their properties.
The Karki-led commission has so far received 24,000 complaints from loan shark victims and around 20,000 of them are from eight districts of Madhesh and Nawalparasi (Susta West). Of the total complaints, around 1,800 have so far been settled through compromise, paving the way for the return of 8 bigha (5.42 hectares) of lands to victims from lenders. The commission has been ensuring the settlement of disputes by documenting exact loans provided to the victims and limiting the interest rate at no more than 10 percent.