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Gujarat Police Launches Drive Against Moneylenders for Crimes, Harassment: Report

Moneylenders have been accused of rape, physical violence, illegal seizure of properties and other forms of violence. There have been also been several reports of distressed borrowers dying by suicide.

New Delhi: Usurious interest rates being collected by private moneylenders in Gujarat have been forcing distressed borrowers to die by suicide. Money lenders have also been accused of rape, physical violence, illegal seizure of properties and other forms of violence, according to a report published by The Hindu.

The rising number of harassment cases against borrowers has forced the Gujarat Police to launch a special drive to rein in mushrooming private moneylenders across the state. Directives have also been issued to district authorities even to take a suo moto cognisance of such incidents and to lodge cases given that several victims are in the fear of dire consequences if they approach authorities.

“We have issued a strict instruction to every city and district police regarding action against moneylenders,” The Hindu quoted Gujarat director general of police (DGP) Ashish Bhatia as saying. Bhatia also said that police are inviting people to lodge complaints if they face any harassment from money lenders.

There have been numerous instances of both registered and unlicensed moneylenders forcing borrowers to cough up interest amounts far exceeding the state government-mandated maximum interest rate of 12% per annum from a borrower who has provided collateral, and 15% per annum from those who don’t provide any security. In the event of delayed payments, borrowers are forced to pay huge sums in penalties and a daily interest that compounds.

Ramesh Koli, a 35-year-old farm labourer from Surendranagar district, Gujarat, is one such victim. He had borrowed Rs 30,000 from a private moneylender in July 2022. He paid the principal amount and a full Rs 50,000 as interest within two months after borrowing the money. But the moneylender was still not satisfied. He forced Koli to pay another Rs 30,000 and warned of terrible consequences if he did not pay. After Koli sought help from his Sarpanch, the moneylender slashed the amount by half to Rs 15,000.

“It was horrible. No one should borrow from moneylenders,” said Koli, according to the news report.

A 37-year-old woman from Rajkot was allegedly raped on multiple occasions after her husband, an auto driver, could not repay the Rs 50,000 he had borrowed from a private money lender. The woman approached the police and filed a case against the moneylender in December 2022.

In Ahmedabad, a 45-year-old man ended his life in September 2022 after a moneylender forced him to cough up Rs 5 lakh in exchange for Rs 50,000 he had borrowed. According to a first information report (FIR) filed by the local police, based on the complaint by the victim’s wife, he was driven to suicide after the moneylender forced him to pay Rs 18 lakh more. Three people were named as accused in the case.

Describing private moneylenders as “bloodsuckers”, Surat police commissioner, Ajay Tomar, appealed to people to come forward to lodge cases if they face harassment, according to The Hindu.

Tomar said Surat Police had already filed 34 cases against erring moneylenders in the first week of January and arrested 31 accused. Three persons are on the run.

In Surat, economic distress is compelling the poor to approach moneylenders to borrow meagre amounts at exorbitant interest rates, the news outlet reported. Between October 2022 and December 2022, Tomar said Surat Police had filed 53 cases, many of which were taken up suo motu. Licenses to operate as moneylenders in Gujarat are issued by local registrars who look after cooperative societies.

Meanwhile, DGP Bhatia told The Hindu that the police’s role comes only after a complaint is filed, but they would like to be proactive. “We want to encourage people to come forward and file complaints,” he told the newspaper.

The state police has issued directions to district police officials to lodge FIRs against loan sharks who lend money without registration, or above the set limit of interest rates, those found seizing properties of borrowers against the loan amount, or found harassing the borrower under Sections 384 and 387 of the Indian Penal Code (IPC).

Additionally, in the event of the borrower not being able to repay the borrowed amount resulting in the lender confiscating properties, police have been asked to book lenders under the Prevention of Money Laundering Act (PMLA) and the Gujarat Money-Lenders Act.

If you know someone – friend or family member – at risk of suicide, please reach out to them. The Suicide Prevention India Foundation maintains a list of telephone numbers they can call to speak in confidence. Icall, a counselling service run by TISS, has maintained a crowdsourced list of therapists across the country. You could also take them to the nearest hospital.