KOCHI: The recent death of a 39-year-old KSRTC conductor allegedly following harassment by money lenders, and a woman ending her life in Perumbavoor reportedly due to threats from online lenders have sparked concerns about the resurgence of illegal money lenders.
Lack of stringent drives like Operation Kubera, and inadequate police action appear to have enabled loan sharks to freely distribute loans and subsequently resort to intimidation to recover the money.
Naduthara Veettil K Manoj, a resident of Kuzhalmannam and a conductor at KSRTC’s Chalakkudy depot, had been enduring severe harassment from lenders who were once his friends. Following their threats, Manoj left home and had been living at his sister’s house for the past three years. His relatives alleged that the lenders attempted to assault him multiple times at the depot. On July 9, Manoj was hospitalised, and died nine days later on July 18 at a private medical college hospital in Thrissur.
The fact that the debtors are ending lives due to threats from money lenders is a matter of concern. If borrowers fail to repay the loan, the lenders start harassing their family and friends, causing severe mental distress that can drive many to suicide.
The loans, their amounts typically ranging from Rs 5,000 to Rs 50,000, are offered for short periods of three to 15 days, on exorbitant interest rates of 60-100%. The process involves minimal documentation, usually just a photograph, Aadhaar card, and PAN card. Since there are no income verification or standard checks, people can easily fall in the trap.
This where deterrents become important. In May 2014, after five of a family ended their lives in Thiruvananthapuram due to pressure from loan sharks, then home minister Ramesh Chennithala launched ‘Operation Kubera.’ What followed was a statewide police crackdown on illegal lenders.
Alleging that Kerala had become a haven for illegal lenders, Chennithala said, “Operation Kubera was a success, but the LDF government failed to build on it, and the initiative was discontinued. The government has not taken any effective steps to deter illegal money lenders.” He said several gangs from Tamil Nadu are involved in offering loans to middle and upper-middle-class families, and they particularly target women.
“The lenders collect repayments daily or weekly for steep interest rates, such as Rs 10 to 15 for every Rs 100 borrowed, a practice notoriously known as ‘meter interest.’ Immediate government intervention is crucial to curb this,” Chennithala said.
Another threat are ‘loan apps’ that target those in financial distress, often people from middle and upper-middle-class families. Unregulated loan apps are proliferating in the country, exploiting and harassing people by charging sky-high interest rates.
When contacted, a top police official said people can lodge complaint at their local police stations against harassment by lenders. He also said they should not depend on any unscrupulous mobile app offering short-term, instant loans. “Verify if these NBFC-backed loan apps are genuine by referring to the RBI website,” he said.
As per the police, reputed loan providers always verify documents before offering money.