​​​​​​​The anti-usury law should be implemented forcefully so that the victims get immediate relief
Despite some uncertainty, the House of Representatives unanimously passed the anti-usury ordinance replacement bill on Sunday, raising hopes that the usury victims would find justice as loan-sharking has now been criminalised. Thus, lending money with the intention of earning high interests using unfair transactions is now a criminal act. As per the provisions of the bill, indulging in unfair transactions, or loan-sharking, can fetch a prison sentence of upto seven years and a fine of Rs 70,000. It is illegal to prepare a loan deed of a transaction that never took place, preparing a loan deed higher than the actual amount in the course of a transaction, or adding interest to the principal amount. Similarly, charging interest rates that exceed the principal amount will now be punishable. It also prohibits the use of violence or threats to recover the debt. It has come to light that violence, including abuse of women, has been employed to forcibly transfer the debtor's property, namely land. Should a case of forceful transfer of property take place under an unfair transaction as laid down by the bill, the amount transacted and the interest shall be returned. The bill will now be forwarded to the National Assembly, from where it originated, and once endorsed with the amendments, it will be sent to the President for authentication. Once validated, the law will come into immediate effect.
The Lower House has endorsed the bill but notwithout undergoing some hiccups. On May 3, the government had issued an ordinance criminalising loan-sharking and providing justice to the victims, following weeks of protests by the usury victims in the capital.
A bill replacing the ordinance was presented in the National Assemblyand duly endorsed on June 30. The bill should have been passed by the parliament by July 5, or within 60 days of the commencement of the House session, as per the constitution. However, on the day the HoR was to pass the anti-usury bill, the CPN- UML and other opposition parties had stalled the House proceedings over Prime Minister Pushpa Kamal Dahal's remarks at a book launching ceremony on how an Indian national had helped him become the prime minister. As the anti-usury ordinance ipso facto became ineffective after 60 days, some people argued that the anti-usury ordinance replacement bill also became ineffective. However, it was agreed that a bill under consideration of the House of Representatives becomes ineffective only when the House is dissolved.
The usury problem now seems larger than it was thought to be. A commission formed to probe the woes of usury victims under former judge Gauri Bahadur Karki has collected 24,000 complaints, of which about 1,880 cases have been settled through mediation. Lenders have given up their claim to Rs 1.15 billion from their borrowers, according to the commission, pointing to the magnitude of the problem.
Once the anti-usury law comes into force, it should be implemented strongly so that the victims get immediate relief. The local bodies have the onus to provide justice to the victims in areas under their jurisdiction by verifying the authenticity of the transactions carried out.
Automatic pricing
After the state-owned Nepal Oil Corporation (NOC) cleared the dues of Rs 31 billion to Indian Oil Corporation (IOC), the government has decided to implement the Automatic Pricing System (APS) in the sale of petroleum products, such as petrol, diesel, kerosene and LPG. The APS came into force from Sunday midnight. Although the APS was introduced in 2014, it was not regularly practised, citing losses to the NOC, which receives a new pricing list of the petroleum products from the IOC every fortnight. The Ministry of Industry, Commerce and Supplies has, however, said the decision will not be applicable to aviation fuel.
As per the new price list, petrol will cost Rs 164 per litre, diesel Rs 146 per litre in the Kathmandu Valley and LPG (per cylinder) will be available at Rs 1,790.
Despite the fact that NOC was able to pay back the outstanding dues to the IOC, it still has to pay the government Rs 3.5 billion, and it still has a debt of Rs 29 billion in total. Prices of petroleum products have now become cheaper in Nepal than in India. Therefore, there is every possibility of their being smuggled into Indian towns close to the open border. The authorities must keep an eye on preventing the fossil fuels from being smuggled into India.
A version of this article appears in the print on July 18, 2023, of The Himalayan Times.
