Free Press Journal

Bhopal: After deluge of farmer suicides, govt reads the riot act to moneylenders

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Hoshangabad: Hoshangabad division commissioner Umakant Umrao, has said that the administrative officers have the powers to free anyone from the clutches of moneylenders. His revelation comes after a spate of farmer suicides all over the state, including in the division.

He was addressing a meeting on ‘effective implementation’ of the MP Moneylenders Act, 1934. Giving detailed information on the provisions of the Act, he directed all SDMs that they should frustrate the attempts by unscrupulous moneylenders to grab the land of farmers. He said that the administration should ensure that those lending money on a commercial basis have the licence to do so. If any licenced moneylender violates the rules, action can be taken against him under the Act. This may include cancellation of his licence and imposition of fine (which may go up to Rs 2000).

Any person who is the victim of a moneylender can submit his application to the SDM concerned on plain paper. He can also complain to the tehsil-level control room. He said such control rooms would be established at tehsil headquarters.


He said once such an application was received the authorities should find out what amount was taken as loan by the farmer, what was the rate of interest at which it was taken, why the farmer felt the need for taking loan and also the present economic status of the farmer’s family. The SDMs should also find out how much amount has been returned and how much remains unpaid. If the moneylender is not registered, the creditor need not return his loan.

He said that in no case should the interest exceed the principal amount. Umrao said the MP government gave loan on 0 per cent rate of interest but still, due to lack of information, farmers get caught in the loan trap.

He said the SDMs should minutely examine all cases coming before them.

He said that “things happening around us are painful”. He said that the SDMs should collect information about the farmers groaning under the weight of huge loans. They should counsel them and try to find out how and why they fell into the trap of usurious moneylenders. They should also try to find whether besides economic, they are facing other problems too.

He said that the list of authorised moneylenders should be displayed on the notice boards of SDM offices. The moneylenders who want to do business in villages will have to get the resolution approved by the Gram Sabha and then get themselves registered. The moneylenders will have to obtain registration from Janpad and district Panachayats respectively if they want to do business in these areas and from civic bodies in case of towns. Those lending money in areas outside their jurisdiction can be punished.

After registration, if the moneylender gives a loan to any person, he will have to issue a slip indicating the amount, details of the moveable and immoveable property mortgaged, rate of interest etc. Every moneylender is supposed to submit an annual return to the SDM mentioning the amount received by him as interest and as repayment of properties.

He said that the SDMs should also keep on an eye on registration of property. If a property is being re-registered after a gap of just 5-6 years it should be probed whether it is an attempt to grab property.

Provisions of Moneylenders Act say that they

– Should have a licence
– Can do business only in the area for which licenced.
– Should issue slip to farmers indicating amount of loan, rate of interest, property mortaged.
– Interest amount cannot exceed the principal amount.
– Should submit annual returns on amount received by way of payment of interest and repayment of principal amount.

Instructions to SDMs

– Display list of licenced moneylenders on notice board
– Cancel licences of moneylenders violating the rules
– Tell farmers they need not repay loans of unlicenced moneylenders
– Contact families of stressed farmers, ask them what made them take the loan
– Don’t allow moneylenders to grab land of farmers