President Ramchandra Paudel on Friday authenticated the endorsement of the bill criminalising usury.

“The President has authenticated the bill endorsed by both federal houses as per Article 113 (2),” the Office of the President said in a statement. With the endorsement from the head of the state, the bill has now become a law.

The government on May 3 had introduced an ordinance to amend the prevailing criminal code and define the practice of usury as a criminal offence. The ordinance later expired as Parliament did not adopt it within 60 days of the House session’s commencement.

On June 20, the government tabled a replacement bill at the upper house, which endorsed it on June 30. Then, the bill was tabled at the House of Representatives two days later.

The bill to replace the ordinance must have been endorsed by Parliament by July 5. But it couldn't be passed at the meeting as the opposition parties obstructed the House proceeding to protest against a controversial statement by Prime Minister Pushpa Kamal Dahal at a book launch event.

Later, on July 16, the House of Representatives unanimously endorsed the bill and sent it back to the National Assembly, where it originated.

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 new provision. 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.