KARACHI – The Sindh Private Loans Bill 2023, which authorises heavy penalties against the private lenders offering interest-based loans and harassing debtors, has been formally approved by Sindh Governor Kamran Tessori.
The Sindh Private Loans Bill 2023 has enabled stringent legal proceedings against the private lenders.
If private lenders are proven guilty of harassing debtors, they might receive a five-year prison sentence and penalties up to Rs500,000.
The bill was adopted in response to the growing number of suicides by debtors who had taken loans from private lenders, including online lending applications, and were reportedly subjected to extortion and harassment.
Under the new law, a person or business involved in interest-based financing may have their property seized by the government. It allows the authorities to impose heavy fines on people who are found to have received even one penny through these loans.
The governor of Sindh, Kamran Tessori, urged people to report usurers to the authorities right away so that they can take stern action against them. In response to the complaints of the citizens, he continued, the interest-based moneylenders will face stern legal proceedings.
Debtor’s Suicide
As hundreds of thousands are bearing the brunt of record inflation, some of them were lured by fishy apps offering instant loans without any verification.
Last Wednesday, a father of two was trapped by one such app and he faced nonstop harassment and threats from the recovery agents of the platform after which he took his life.
The deceased’s wife told the media that her husband lost his job about six months back and was facing hard time finding a job. He eventually took loan from these apps for his children’s school fees and house rent.
Masood applied for a loan of Rs13,000 from a digital lending app, which was raised by multiple times and he was asked to pay Rs100,000 within the given deadline. As he was struggling to pay back, officials of the app started blackmailing him.
The grief-stricken family said Masood got another loan to repay the first amount and as he was threatened by the apps of police action.
