‘120% interest higher than legal rate’
Dimapur, Sep. 14 (EMN): The Nagaland Pradesh Congress Committee (NPCC) asks the government of Nagaland to check money-lending businesses in Nagaland, which the Congress stated was causing much suffering to borrowers.
The communications cell of the NPCC issued on Saturday a press release to the media stating that people are being caught in debt trap, facing loss of properties and facing economic ruin thanks to unscrupulous moneylenders, licensed or unlicensed.
“The mushrooming of private money lenders and loan sharks in Nagaland is a cause for serious concern as many people are caught in a ‘debt trap’ leading to loss of properties and disruption of family life including divorces that is tearing our social fabric, apart from economic ruin,” the NPCC stated.
“The ignorance on the part of borrowers has also contributed to this vicious cycle of debt trap being laid out by unscrupulous money lenders.”
The Nagaland Money Lenders Act of 2005 section-24 stipulates that those engaged in money lending business without a license shall be punishable with imprisonment for a term, which may extend to six months or with a fine, which may extend to INR 2500 or with both.
“Moreover, as per the relevant sub section of Section 7, no money lender can charge interest at a rate exceeding more than 3 (three) percent above the prevailing average bank rates of interests on loans and rate of interest shall be per annum simple interest on the principal amount of the loan,” the press release stated.
The NPCC stated to have learned that the rate of interest charged by some moneylenders is as high as 120% per annum, which is also compounded.
“Under Section 16(1) (b), any money lender whether licensed or not who receives interest higher than the rate prescribed under Section 7 or at the rate higher than the rate shown in the accounts shall be punishable with imprisonment for a term which may exceed to one year or with a fine which may extend to five thousand rupees or with both,” the NPCC stated.
The NPCC explained further that the Act also guarantees that any aggrieved person can file a money suit in respect of any offence like excess charge of interest, lack of proper maintenance of records, failure to keep full and detailed description of each of the articles taken in pawn by the pawn broker.
“In case of criminal offence arising out of this act like threat, intimidation, assault, abduction, kidnap, forceful seizing of movable/immovable property etc., a criminal complaint can be lodged under Section 20 of the said Act before the competent court of judicial magistrate.”
‘NPCC therefore demands that the state government strictly enforce the Nagaland Money Lenders Act, 2005 and rein in those money lenders/loan sharks, many of whom do not even possess the license to carry out money lending business while charging exorbitant interest rates as high as 120% per annum making a mockery of the said Act,’ the press release stated.
‘The borrowers many of whom are victims out of ignorance must also come forward to file criminal complaint against the unscrupulous money lenders or else their silence will only invite more misery heaped upon by money lenders,’ the Congress added.
