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Shylocks of Old City rip their pound of flesh
Blame it on poverty, lack of education or pressing needs, the situation of the old city Muslims, who were trapped in vicious circle of debt by illegal financiers or money lenders, has become miserable. These people take money from financiers on interest basis and enter into the never-ending debt cycle, where there is no escape from.
Moneylenders, also known as Pehalwans, resort to abduct wives, sisters and daughters of debtors if they default
Hyderabad: Blame it on poverty, lack of education or pressing needs, the situation of the old city Muslims, who were trapped in vicious circle of debt by illegal financiers or money lenders, has become miserable. These people take money from financiers on interest basis and enter into the never-ending debt cycle, where there is no escape from.
The debt spiral exacerbates and the borrowers can never repay the debt amount due to draconian terms and conditions of the money lenders. “A rough estimate puts the illegal business at crores of rupees a year,” an activist from the old city said. These moneylenders are musclemen known as ‘Pahelwans’, who sometimes enjoy political clout.
These Pahelwans operate through a network of agents, sub-agents and vasuli (money collector). There were a few instances in the past where the Pehalwans abducted the wives, sisters or daughters of the debtors if they defaulted in repaying the borrowed amount. The practice of abduction and murder is common because of certain loopholes.
Many instances where debtors commit suicide as a result of the pressure exerted by the money lenders or sometimes the debtors are reportedly murdered. In an instance occurred in 2009, an allegedly illegal financier reportedly pushed a girl from the first floor of the historical monument of Charminar when her mother defaulted to repay Rs 20,000 money borrowed from the loan shark.
The girl died after battling for life in a hospital. The parents alleged that they paid more than Rs 50,000 only as an interest amount, and her daughter was kidnapped by that financier when she refused to pay the principal amount. When the girl’s mother complained to the police about her daughter’s abduction, the financier killed her daughter. However, the police have a different version of the incident.
In another incident in December 2014, a small trader from Chatta Bazar, had called the police for help, hours before his murder, but he was stabbed by a financier in broad daylight. These ‘Shylocks’ resort to kidnapping of the debtors and subject them to terrorizing, abuse and intimidation.
“A study shows a disturbing picture of the daily harassment and violence meted out to small traders, daily wage earners and auto-rickshaw drivers, often paying a daily interest of Rs 100 for a 100-day period of an amount of Rs 10,000 and if he/she defaults, then he/she would have to pay a penalty of another Rs 100 per day.
The rate of interest would range anywhere from 30 per cent to 100 per cent depending upon the need of the borrower. If the amount is in lakhs, an interest of 10 per cent is deducted as interest at the time of handling over the loan amount,” the activist explained.
Though the exact number of these illegal money lenders touched the five-figure mark, the police were not aware of the actual figure. In South Zone, which includes 17 police stations, as many as 200 cases since 2013 have been registered against the loan sharks for harassing poor borrowers under various sections which deals with wrongful confinement, extortion and criminal intimidation of the IPC and the Telangana Money Lending Act.
But surprisingly, very less or no convictions have taken place so far. According to police, the money lenders, mostly illegal, operate from South Zone with 90 per cent of Muslim population. The illegal loan sharks were not deterred by the police raids and arrests and continue to indulge in similar offences.
“Continuous drive is done against illegal financiers but victims seldom approach the police to file complaints against the illegal money lenders. “Pending cases are no longer with the police but are transferred to courts,” DCP (South) V Satyanarayana said adding that sometimes victims change their version when police were about to take action.
A woman from Yakutpura area, who had taken a loan of Rs 1 lakh, has so far paid an interest of Rs 2 lakh and in the process, mortgaged her land. The principal loan amount still remains to be paid.
By:Victor Rao
