February 22, 2024, Thursday
Nepal 1:37:26 pm

Parliament passes bill related to loan sharking

The Nepal Weekly
July 18, 2023

The House of Representatives (HoR), on Sunday unanimously passed a bill related to Loan-sharking.

Earlier, due to the obstruction put by main opposition party CPN-UML among others, the bill regarding loan-sharking could not move forward. After the government addressed some of the amendment proposals put forward by the parliamentarians, all parties agreed to pass the bill. The Bill, 2080 BS to amend some Nepal Acts related to the Civil Code, which originated in the National Assembly, has a provision to address the

victims of loan-sharking.

In the Criminal Code 2074 BS, Section 249 (a) has been added to render acts of improper give-and-take of money a crime and to punish such acts. The provision includes arrangements for preparing a document when someone claims to have made a payment but has not, preparing a document for an amount greater than the actual transaction amount, adding interest to the document at the time of the transaction, preparing a new document with added interest, refusing to acknowledge the repayment of the amount owed, charging excessive interest beyond the agreed terms, making threats, violence, or exploitation for the recovery of an unlawful debt, or transferring the rights of immovable property of a debtor based on an unlawful transaction or acknowledging an unlawful transaction as valid.

There is a provision that individuals who conduct transactions against the rules can face imprisonment for up to 7 years and a fine of up to Rs 70,000. If a person involved in an unlawful transaction transfers the equivalent amount of the debtor’s immovable property, the provision allows for the unlawful transfer of the debtor’s rights to be canceled. Similarly, if the unlawful transaction is made in someone else’s name, provisions are in place to rectify it.

A few months ago, the government also formed a committee to understand the problems of loan-shark victims who were protesting in Kathmandu. Prime Minister Pushpa Kamal Dahal met the usury victims and promised to introduce a law to address their issue.