National Assembly passes bill to replace loan-sharking bill

Published On: July 2, 2023 09:30 AM NPT By: Ishwari Subedi

KATHMANDU, July 2: Both the houses of the Federal Parliament are about to pass the replacement bill on loan sharking. The replacement bill was made after both houses approved the ordinance introduced by the government regarding loan-sharking. The replacement bill was passed by the National Assembly on Friday.

This bill is also to be passed by the House of Representatives (HoR) meeting on Sunday and will be sent to the Office of the President for authentication. The ordinance was issued to amend some Nepal laws related to the Civil Code on May 3 last year to prevent the situation related to loan sharking. In the ordinance, provision was made to give justice to the victims of loan sharks and to punish the fraudsters.

After the ordinance was approved by the HoR on May 10 and by the National Assembly on May 19, the bill to amend some Nepal laws related to the Civil Code was registered on June 20 to replace it.

The ordinance was tabled in Parliament on May 7. According to the Constitution, since the ordinance becomes inactive after 60 days of submission to the parliament, a replacement bill must be passed and verified to avoid the ordinance becoming null and void.

In the replacement bill, section 249 (a) has been added to the National Penal Code, 2074 BS, making unfair transactions an offense and with punishment for such acts.

Preparing a document stating that someone has given an amount that has not been transacted will be punishable by law. Similarly, charging exorbitant interest rates to the extent that the interest exceeds the principal amount will also be punishable as per the proposed law.

The bill considers forceful transfer of the debtor’s immovable property using any kind of threat or violence or exploitation for the purpose of debt recovery as an unfair transaction.

In the bill, there is a provision of up to seven years of imprisonment and a fine of up to Rs 70,000 for those who make transactions against the law. The bill also provides for cancellation of the transfer of immovable property rights of the debtor to the name of the person who committed the unfair transaction.