[ Amar Sangno ]
Unauthorised money lending culture in Arunachal Pradesh has ostensibly become an uncontrollable social menace. Over the years, this culture has maimed hundreds of families, forced spouses to separate, turned relatives to rivals, families rendered homeless, and many ruined and reduced to abject penury.
Forced by some prevailing situation, the borrower takes a loan, agrees to10 percent interest; sometimes without mortgage or security. Failing to repay the debt emboldens money lenders as they take law in their own hands and often go on a rampage to recover the principal and interest amounts. The trend makes debtors vulnerable and subject to various humiliations.
There are several unreported and unaccounted violations owing to the money lending culture. The lender often forcefully takes away property (movable or immovable) or security of debtors without following legal procedures.
When debtors fail to pay back, the lenders resort to many tactics to recover their principal and interest amounts, such as locking or sealing the debtor’s house, forcing them to forfeit properties without verifying the cost, keeping debtor’ children or wife hostage as mortgage, hurling abusive language and imposing compound interest from 10 percent to 20 percent in case the debtor fails to meet the deadline.
Unverified records say that hundreds of money-lending cases are being tried at various Session Courts and also at the High Court under Code of Civil Procedure across the state; involving immovable or movable properties.
Most of the debtors are either small-time contractors or seasonal politicians who contest elections and lose, leaving a trail of debt.
Although social organisations and civil societies take on this social issue, many often fail.
For instance, the East Kameng Social Welfare and Culture Organisation, in its 39th foundation day cum 7th General Conference, held at Seppa in October 2017, attempted to bring reformation by discouraging ten percent interest charged by the money lenders.
However, no social organisation in the state could effectively tackle the menace. Perhaps because it has already become endemic involving every member.
There seems to be a respite, thanks to the State Legislative Assembly that passed the Arunachal Pradesh Money-Lending (Regulation) Bill 2018, in the State Legislative Assembly on 15th March, 2018. Once the bill becomes an Act, it is believed that it will provide relief to many debtors, who are forced to undergo traumatic experience by money lenders.
Deputy Chief Minister Chowna Mein, who is also the Minister Finance, had introduced the bill, which was subsequently passed without many hiccups.
Members seemingly were convinced that the unregulated money-lending trend needs to be regulated.
“This bill is much needed to free the poor from the clutches of unscrupulous money-lenders,” says Finance Commissioner Ashish Kundra.
Highlighting the objectives of the bill, the Finance minister had stated that there is no legal mechanism to check unfair practices and rampant unauthorised money lending.
‘The enactment would ensure transparency in the money transactions, and would be regulated in a proper manner through regular checking of authorized officers, thereby by controlling the unfair money lending activities’.
It said that the decision to enact an Act came after the State Level Coordination Committee meeting, held on 31st January, 2017. Once this bill becomes an Act, it will protect debtors from exploitation at the hands of unauthorised lenders.
According to the bill, all money lenders must register with the government and the government would appoint the Registrar General of Money-Lending, along with Divisional Registrar, District Registrars and Assistant Registrars to look after the affairs.
Further, money lenders will be given license to carry out money-lending business, except in the area for which he has been granted a license, with terms and conditions.
Section 31(i) says, the state government will notify the maximum rates of interest to be charged by the money-lender in respect of secured loan and unsecured loan.
“No money lender shall receive from debtor any sum by way of compound interest on a loan advanced or intended to be advance or any sum by way of interest rate at a rate higher than the rate of fixed under sub-section(1)”.
The bill also says whosoever carries on the business of money-lending without valid license, shall on conviction, be punished with imprisonment of five years and fine which may be extended up to five lakh rupees or both.
It is hoped that the enactment of the regulation would provide legal safety to both lenders and debtors, and more importantly to innocent family members of debtors who have often been traumatized by the lenders.
[ Amar Sangno ]