Usurers employ new tactics to exploit poor
The elders made the decision during a meeting with senior officials of local administration. PHOTO: FILE
After the Punjab Assembly unanimously passed a bill on Tuesday to impose a ban on usury business with a 10-year sentence in prison, private lenders and usurers have decided to continue with the illegal business of interest on private loans.
Private lenders in Rawalpindi are running this illegal business in the name of commercial business instead of usury.
These private loans carry an interest of nearly double the national average and require collateral in the form of jewellery, motor vehicles and houses.
Sources said that elements associated with this illegal business held a meeting at a local hotel in Gawalmandi Chowk Rawalpindi. The meeting decided to continue with the business with a new name of “interest” instead of usuary.
According to sources, the usurers decided that documents of houses and other properties of citizens, families and shopkeepers, who borrow loans, will be mortgaged to provide loans on interest. Apart from this, an open cheque worth double the actual lending amount will also be collected from the borrowers.
The sources said that usurers also decided that besides the mortgaged property, an affidavit will also be taken from the citizens, who take a loan on interest, to sell the property in case of default.
In Rawalpindi, usury is rampant in Arya Mohalla, Peoples’ Colony, Tench Bhata, Raja Bazaar, Dhoke Ratta, Adiala Road, Chakri Road, Masriyal, Dhok Khaba, Dhok Syedan, New Katarian, Pirwadhai, Bangash Colony and Sadiqabad, where usurers have, apparently, set up shops of electronics, furniture, household goods to sell them on instalments, but in these shops, they lend loans on double interest. Rawalpindi is a major centre of usury business.
Businessmen and citizens from adjoining areas including Jhelum, Chakwal and Azad Jammu and Kashmir also frequent these private centres to borrow loans with heavy interest.
A large number of citizens and hundreds of shopkeepers have ruined their homes by getting caught up in the debt trap after taking loans from these usurers.
Hundreds of citizens and shopkeepers have paid interest on the principal amount but they continue to pay interest after being trapped in the vicious cycle.
A large number of citizens, including widows and small businessmen, have lost their property, jewellery and other property by getting caught in the debt trap of usury.
Sources said that many women have to compromise on their dignity and modesty after failing to pay off the loan while several widows were forced to marry off their young daughters to middle-aged usurers to evade a whirlpool of usury.
The business is run with the alleged collusion of local police. Some police officials are also involved in this heinous business. Police arrest the citizens on the complaint of the private money-lenders and register cases of fraud against the borrower.
At times, usurers forcibly take cash, cheques and credit cards from citizens after getting them arrested by police. The usurers have also built private jails where they keep defaulters and torment them. They lock up the citizens who fail to pay interest in these private jails.
Shamsher Ali, a senior citizen, said that a friend of his had borrowed a loan on interest from a usurer in Arya Mohalla. He said that he was a guarantor in the deal. He said that being a grantor, he had to pay interest for five years and later faced a lawsuit. He said that the usurer had also locked him up in his private jail in Arya Mohalla for a day.
M*, a woman trapped in the menace of interest, said that she has lost everything in the curse of interest.
Interestingly, the usurers are also financiers of various political parties and they also get political pressure when needed.
Usurer Arbaaz Khan said that a money-lender gives a sum of millions of rupees at once but, in return, he gets the amount in instalments. He said that the same method is also used by banks. He said that no bank gives a loan without interest. “How can moneylenders lend without interest and profit?” he asked.
He said that if the government is serious about abolishing usuary, it should be abolished in banks and later action should be taken against private lenders. He said that the government borrows billions of dollars on interest from the IMF, friendly countries and the World Bank. He asked whether it was permissible to pay the interest on international loans.
Meanwhile, a Rawalpindi police spokesperson said that the legislation on private business of usury has been completed, however, no orders have been issued to the police to take action against usurers. He said that whenever such an order was received, the police will start registering cases against private lenders.
Published in The Express Tribune, August 19th, 2022.