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Law against lenders rarely enforced

Law against lenders rarely enforced
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The plights of common people, who are becoming victims of private money lenders, strongly supports the need for a stringent law against these money lenders. Despite police action, the private money lenders are fleecing poor and middle-class people, who borrow from them, in the name of high rates of interest.

Karimnagar/Warangal: The plights of common people, who are becoming victims of private money lenders, strongly supports the need for a stringent law against these money lenders. Despite police action, the private money lenders are fleecing poor and middle-class people, who borrow from them, in the name of high rates of interest.

Many private lenders are running the business without licenses or with expired licenses charging exorbitant rates of interest and forcing the needy people to sign on empty documents. In Korutla mandal, the police arrested two private money lenders, who were running finance company without license and collecting exorbitant interest rates from the people belonging to Warangal, Karimnagar, Jagtial, Korutla and Metpally areas.

A victim, Sambaiah, who borrowed loan from a private money lender, alleged that without his knowledge the private money lender attached his property and was harassing him by filing false court cases against him.

In Keshvapatnam, Molamguru, Thadikal and Kothagattu villages of Shankarpatnam mandal of Karimnagar district, some of the private money lenders earned crores of rupees by running money lending business without license. They are reportedly charging high interest rates running daily finance business.

Some money lenders are following concepts like meter vaddi (12-hour interest), daily and weekly interest and various other short-term interest collection methods and forcing loan-takers to repay within the prescribed time limit.

Local BJP leader Shravan Kumar said, “There is an urgent need to control the money lenders for collecting exorbitant interest rates by adopting various collection methods. It is noticed that some of the private money lenders are responsible for the farmers’ suicide in rural areas, as the farmers are unable to clear their debts, who borrowed money for high interest rates”.

Stringent action should be taken against those, who organise chits business without license or expired license and also against those, who force the people to sign on empty documents after taking loans, he added.

Recently in Mahabubabad district, the police officials cracked down illegal money lending business by conducting raids on residences and business firms of several money lenders in the town. They seized Rs 60 lakhs and took as many as 150 promissory notes from their possession.

Local advocate R Rajendra Prasad said that money lenders harassing borrowers is an offense and the case is non-bailable. As per the Money Lending Act, interest rate should not exceed 2 per cent or more than the percentage charged by commercial banks. The police are not implementing the law effectively and the people also could not effectively using it, he observed.

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