CIB cracks down on moneylenders

The Central Investigation Bureau of Nepal Police has stepped up its crackdown on illegally mushrooming private moneylenders for allegedly charging exorbitant interest on loans they extend to borrowers.

Recently, police raided various unlicensed ‘investment companies’, jewellery shops, fancy stores and electronic stores in Sunsari and Morang districts and arrested eight persons. Superintendent of Police Jeevan Shrestha, CIB spokesperson, said the so-called investment companies and small-scale stores were found collecting deposit from the general public at interest rates ranging from eight to 12 per cent and using the money to extend loans for an annual or half-annual rate of minimum 24 per cent.

“What is more astounding is that they issued savings account passbook to depositors and collected deposit from them on a fortnightly and monthly basis. They were operating without obtaining approval of Nepal Rastra Bank, the regulatory and supervisory authority of banks and financial institutions,” he informed.

CIB said Bhim Prasad Chaudhary, 40, and Shyam Peshkar Tharu, 50, of Itahari-based ‘Apan Investment Pvt Ltd’; Chandra Bahadur BK, 31, and Anita BK of Dharan-based ‘Halesi Investment Pvt Ltd’; Raju Sah, 27, of Biratnagar-based ‘Chautari Investment Pvt Ltd’; Sunil Guragain, 34, of Itahari-based ‘Monsoon Investment Pvt Ltd’; Dilli Prasad Acharya, 28, and Prakash Acharya, 35, of Itahari-based ‘Chhintang Investment Pvt Ltd’; and Sitaram Luintel, 38, of Biratnagar-based New Abhash Fancy Store were arrested. CIB is searching for other absconding suspects.

SP Shrestha said those arrested were charging exorbitant interest or taking advantage of borrowers’ financial problems by collecting money from the general public and promising them high interest on their deposit.

They have been booked under Banking and Financial Institutions Act.

The so-called investment companies were not even registered with the Office of Company Registrar and were collecting deposit and extending loans without obtaining approval of the central bank and the Department of Cooperatives.  “The office of such companies did not operate from a specific place, but ran through their agents,” he said.

It is learnt that they had collected over Rs 170 million from the general public. “We have launched further investigation to expose illegal moneylenders across the country, including in Kathmandu Valley.  Such unauthorised company, moneylenders and deposit collectors are causing huge loss of revenue to the state coffers.