Crack Down on Unauthorised Private Moneylenders

 

Crack Down on Unauthorised Private Moneylenders

A strong and immediate crackdown on unauthorised private moneylending has become essential. In many areas, this unlawful practice has developed into a cruel and organised system of financial exploitation. Disturbingly, allegations are also heard that certain persons holding government employment are privately engaged in such moneylending activities. If these allegations are found true after proper investigation, strict departmental and legal action must follow.

These moneylenders usually begin by befriending poor and financially distressed people. They present themselves as well-wishers who are ready to provide money during illness, family emergencies, marriages or other moments of crisis. However, what initially appears to be assistance soon becomes a merciless debt trap.

From the last few days of one month until the 10th or 12th day of the following month—when wages and salaries are ordinarily received—these lenders remain active in the locality. When labourers and other low-income earners return to their modest homes with their hard-earned wages, they are allegedly intercepted, surrounded and compelled to surrender money towards exorbitant interest. In extreme cases, money is reportedly snatched away through intimidation, humiliation or coercion.

The tragedy is that many such lenders are not genuinely interested in recovering the principal amount. Their objective is to keep the borrower permanently indebted so that abnormal and recurring interest can be extracted month after month. A small loan is thereby converted into a lifelong financial burden. The debtor continues to pay, yet the alleged liability never comes to an end.

This is not legitimate lending—it is economic exploitation of the vulnerable. It destroys families, deprives children of food and education, and forces honest workers to live under constant fear. Such practices may also lead to threats, violence, forced transfer of property and, in tragic cases, self-harm.

The Government must therefore create a humane and accessible alternative. Poor and needy persons should be permitted to obtain small emergency loans—up to ₹75,000—from recognised banks or regulated financial institutions without interest, or at a nominal service charge, subject to simple eligibility conditions. The process must be quick, transparent and free from excessive paperwork. Unless lawful credit becomes readily accessible, vulnerable citizens will continue to fall into the hands of predatory lenders.

At the same time, the authorities should undertake an immediate and comprehensive assessment of unauthorised moneylending. Dedicated complaint mechanisms should be established, and the identity of complainants must be protected. Every allegation should be investigated fairly and promptly in accordance with law.

The assets acquired by habitual unauthorised moneylenders should also be scrutinised. Their income, properties, bank accounts and investments must be compared with their declared lawful sources. Wherever wealth is proved to have been acquired through illegal moneylending, coercion or other unlawful means, it should be attached and confiscated strictly through due process of law.

Government employees found participating in such practices should face departmental proceedings in addition to prosecution under the applicable law. Public service cannot be permitted to become a shield for private exploitation.

Those who deliberately trap impoverished families and survive upon their misery are enemies of social justice. Poverty must never be treated as an opportunity for profit, and helplessness must never become a licence for exploitation.

An immediate, wide-ranging and impartial assessment of the situation is therefore necessary. The police, district administration, financial institutions and social welfare authorities must act together to protect vulnerable citizens and dismantle illegal lending networks.

“Ramrajya” signifies justice, compassion, dignity and protection for the weakest members of society. It will remain a distant dream if such predators are allowed to continue their uncontrolled hunting among the poor.

Let the law protect those who have little, punish those who exploit them and ensure that no family loses its entire livelihood merely because it once needed a small amount of financial assistance.

Joy Hind.

— Ashok Kumar Singh
Advocate, High Court at Calcutta