MoHA invites loan shark victims for discussion

Published On: February 26, 2024 08:00 AM NPT By: Republica  | @RepublicaNepal

Govt forms a negotiation committee led by joint secretary

KATHMANDU, Feb 26: The government has called the protesting loan shark victims for a discussion.

The government has formed a negotiation team under the coordination of Rudra Prasad Pandit, joint secretary of the Ministry of Home Affairs (MoHA), and invited the loan shark victims for discussion.

The ministry has sent a letter to the Workers Struggle Committee against Loan Sharks and Fraud and invited them for a discussion.

The letter mentions that there have been discussions in this ministry on various dates to solve the problems related to loan sharking, to amend the law to solve the problems related to loan sharking, and to form an empowered commission. The letter further states that the government is ready to draft the procedures to address the complaints of the victims after the term of the commission ends. The government has pledged to facilitate talks between the two sides and to reconcile the cases. If the two sides do not agree for a reconciliation, the government has decided to hand over the case to the Nepal Police for legally registering the case under the vigilance of the Chief District Officer.

"Despite the above-mentioned arrangement, the attention of this ministry has been drawn to the fact that the struggle committee is carrying out protest programs such as long march and demonstrations to press for a resolution to the loan sharking problem," the letter reads, adding, “As a negotiation team has been formed under the coordination of a joint secretary of the ministry, Rudra Prasad Pandit, to solve the loan shark problem, the government requests the struggle committee to form a negotiation team with a maximum of five members and be present at the ministry for discussion.”

Earlier on Saturday, MoHA had sent a personal letter to Awadhesh Kushwaha, the chairman of the Workers Struggle Committee against Loan Sharks and Fraud  for a discussion. However, the victims refused to go to the discussion based on the personal letter.

Usury victims from Gaddachauki of Kanchanpur in Far Western Nepal and Kakarbhitta of Jhapa in eastern Nepal’s Mechi Province traveled all the way to Kathmandu on foot, demanding the government to solve their problems. The victims who took around 23 days to reach the capital, are reported to have started their journey on January 30.  

The majority of loan shark victims are reported to be people having low income. They took loans from unscrupulous lenders for various reasons, from paying medical expenses to sending their sons abroad for foreign employment and paying for their daughters’ weddings. In exchange, they offered what little land they owned as collateral or agreed to pay the interest rates dictated by the lenders.

Since almost one and a half years down, the loan shark victims have been launching protests, seeking for justice. In July 2023, loan shark victims, mainly from districts of the southern plains, assembled in the federal capital and revealed that the local loan sharks have been duping them of millions of rupees in compound interests calculated in an unfair system locally known as the ‘meterbyaj’.

Two months prior to the assembly, hundreds of victims, mostly women, from several Terai districts had come to Kathmandu after traveling for 11 days on foot to press the government to crack down on unscrupulous lenders. They sought the government’s intervention to provide them with loans at lower interest rates, bring laws against unscrupulous lending and scrapping of personal mortgaging contracts known as ‘Tamasuk’.

Last year too, the government had formed a four-member team headed by the joint secretary at the Home Ministry Rudra Devi Sharma to hold talks with the loan shark victims. The government also formed a commission to investigate and resolve usury-related cases. The commission recorded thousands of complaints in the initial weeks and many loan shark victims were returned their mortgaged lands.

In addition, with the government also endorsing a law that came into effect following the amendment to the National Criminal Procedure (Code) Act 2017, it was expected that the loan sharking victims would finally be free of their financial troubles. Despite a number of steps taken by the government, not all the victims got justice, according to the struggle committee.




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