DIMAPUR, SEPTEMBER 14 (MExN): The Nagaland Pradesh Congress Committee (NPCC) today expressed concern that many people in the state are caught in a ‘debt trap’ due to the mushrooming of private money lenders and loan sharks.
A press release from the NPCC stated that this has led to loss of properties and disruption of family life including divorces. It said that this is “tearing our social fabric, apart from economic ruin.” It recognized that ignorance on the part of borrowers has also contributed to this vicious cycle of debt trap being laid out by unscrupulous money lenders.
The Congress pointed out that the Nagaland Money Lenders Act, 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 Rs. 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% 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 NPCC reported that the rate of interest charged by some money lenders is as high as 120% per annum which is also compounded. This, it pointed out is punishable with imprisonment for a term which may exceed to one year or with a fine which may extend to Rs 5000 or with both.
It informed that people can file a money suit in cases which involve excess charge of interest, no proper maintenance of records, and in 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.
The NPCC demanded 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.
