BAJURA: Micro finance companies along with development banks in Gamaul Rural Municipality have been ordered to shut down operations in line with the municipality’s working committee decision of February 20, 2018.

According to Municipality Chair Hari Rokaya, all micro finances, Deprosc Laghubitta Bikas Bank Limited and Nirdhan Utthan Bank Limited have been sent letters asking them to cease all activities and transactions in Gamaul Rural Municipality.

A village assembly has taken the decision to this effect to promote local cooperatives, letters sent to micro-finances read. Moreover, the municipality has asked financial intermediaries to leave the village within a month after returning the amount invested by members.

“The companies were charging ‘metre interest’ by capitalising on naivety of villagers,” Vice-Chair at the Municipality, Sita Thapa said. “Villagers were found paying annual interest upto 24 per cent.”

As a counter measure, the rural municipality has now decided to run financial transactions through cooperatives. Efforts are ongoing to establish new cooperative including at least one member from each household of the municipality.

According to Chair Rokaya, unethical practices by micro finance companies have forced the municipality to take harsh measures.