In the bloody world of Indian mafia loan sharks
A village can be formed wherever meet: A river, a priest and a loan shark
– Ancient Indian proverb
Amid a haze of grief, the daughters of a mother torched by money lenders in a village in Uttar Pradesh now fear the worst: the return of the suspected killers on bail.
Suddu Singh and Sonu Singh, who have been in the money lending business for over a decade, are now in prison but could be released on bail. Chances are, Devi’s two daughters won’t testify in court and give up blaming the Singh brothers.
Residents of Jajauli, the site of the crime, say the entire village is in the grip of pawn shops due to the absence of state banks and government-recognized non-bank financial corporations (NBFCs).
The victim, Reshmi Devi, a 40-year-old Dalit woman who could not pay the monthly interest of Rs 300 (on a loan of Rs 20,000) is now fighting for life in a hospital in Varanasi. Shortly after the incident, Devi made a statement before a magistrate, accusing the Singh brothers of the crime.
Nidhi, her daughter, is now faced with an endless list of tasks – from organizing money for special treatment for Reshmi to helping the police access the Singh brothers’ cash registers to prove that her mother has paid more than a lakh as interest on a loan of Rs 20,000. Worse, she knows that her request to the Singh brothers to settle the account does not reach the loan cancellation threshold. Monthly interest statements will be sent to him continuously by the Singh family.
“It was the second attack, the first one happened a year ago when the two men poured kerosene on my mother while she was working in the fields,” says Nidhi.
Her only hope is that her mother’s statement to the magistrate cannot be changed under the law. But there’s a good chance the Singh brothers will force the girls to make another statement to the cop to counter the one their mother gave to the magistrate.
“In our village, money lenders are the law. They can make you do anything. We have to save our mother first, ”Nidhi said.
Local villagers told cops that Reshmi had already paid just over 100,000 rupees to money lenders who were charging a whopping 10 percent daily interest, for a total of around 300 percent per month.
“The money was taken for my sister’s wedding and my mother had repaid the loan amount of Rs 20,000, but the money lenders continued to charge her interest. I know she paid a little over Rs 100,000, but the Singh brothers a fortnight ago said she had to pay an extra Rs 5,000, which was supposed to be the penultimate installment of the loan ” , adds Nidhi.
“We made arrests, investigations are underway. The case is in court, ”said senior police officer Anil Kumar. “The lending of private money is illegal, the defendants have been charged with several offenses. “
Kumar said it was not up to the cops to prevent villagers from accessing moneylenders for cash, as the practice of lending money is several generations old. “We can intervene in a crisis and we will take action against the culprits. “
Across India, money lenders rarely spare defaulters and push lenders – mostly from backward castes – to death in many cases. Some are brutally killed, others forced to commit suicide. Taking advantage of the absence of state banks in the hinterland, private lenders operate on their own, charging unusually high interest rates ranging from 75 to 350 percent per month.
“They offer instant cash without any security but are ruthless. Money lenders never incur a loss, they force people to sell almost anything and everything. If that fails, they kill, as happened in the case of Reshmi, ”said Buddhu Singh, one of the residents of Jajauli. Singh said it took the cops just over two hours to reach Reshmi, who was battling his injuries in the absence of medical help.
“His attackers came in the middle of the night. She (Reshmi) received no help and suffered 80% burns, ”Singh said. He adds that the villagers have no choice but to seek money from the money lenders because the banks are located far from the village and their loan sanctioning process is “very, very cumbersome”. .
Money lenders are among the biggest mafia in Uttar Pradesh, India’s second largest state, whose Chief Minister Yogi Adityanath is proud to eliminate the mafia and then to publicize it in with newspapers and television campaigns costing just over Rs 55 crore of the state total. advertising budget of Rs 198 crores (2017-18).
In drought-ravaged Maharashtra, loans from private lenders saw a huge 28% increase in 2017, even as credit from cooperative banks declined significantly.
Studies by government agencies show that pawn shops have a grip – nearly 70% – on rural credit across India despite all efforts to control, suppress or supplant them. “Things can change if the government can find a realistic rural credit system in which the money lender should be integrated into the system. But currently, banks and non-bank financial corporations (NBFCs) are trying to compete with money lenders in their attempt to eliminate them. But that does not happen because most of the banks and NBFCs are not there in the villages, ”explains economist Dipankar Gupta.
In India, every government is giving up billions of dollars in loans to farmers, but the move brings no respite for the struggling class who owe their debts to pawn shops. The government waiver applies to formal credit.
Worse yet, no more than 35 percent of total agricultural loans go to marginal smallholder farmers who own more than 70 percent of the country’s farmland. Bankers across India are unanimous that a large number of struggling farmers may not even benefit from the move. “Private lenders can be vetted if the government guarantees that bank loans get to farmers so they don’t depend on lenders for money,” says Mohan Guruswamy, policy analyst.
“Let the farming community be covered by a formal banking system so that farmers can easily apply for loans for their crops,” says Guruswamy.
He says loan sharks operate all over India and are just as brutal in their recovery process in big cities.
In a recent incident in Calcutta, a car in which the famous poet Brototi Bandhopadhyay was on her way to a function was pulled over on the Hooghly Bridge by a group of loud men demanding cash from the driver, also the owner of the vehicle. Upon investigation, Bandhopadhyay discovered that the vehicle owner had failed to pay a few installments for the loan he had taken from a private lender to purchase the taxi. The money collectors, realizing the celebrity status of Bandhopadhyay, agreed to drop her off at her destination before taking the taxi. Bandhopadhyay then returned home to share the horror story with members of her family.
“In the villages, the situation is worse. They kill you or force you to kill yourself, ”Guruswamy explains.
Repeated studies have shown that over 50 percent of India’s roughly 600 million farmers are somehow stranded with pawn shops. Across India they have different names ranging from Mahajan to Bania to Shahukar. And for generations, they monopolized the rural credit market, robbing farmers of their land, their families and their lives. In many cases, the wives of farmers have been forced into prostitution to pay off debts.
Ashok, a resident of Jajauli, says pawn shops have deep pockets and strong ties to lawmakers. He says everyone goes to the moneylenders in the village because they are the first port of call when there are no banks. Lenders create a debt trap for farmers who rely on successful crops to repay their loans. “So they’re powerful, very powerful. Nothing happens to them, nothing will happen to them. If the Singh brothers get out of jail on bail, you can expect the worst, ”Ashok says.
The 2012 All-India Debt and Investment Survey indicates that nearly 48% of farmers across the country have taken out loans from informal sources such as pawn shops and landlords. According to IndiaSpend, four in ten of the 8,007 Indian farmers who committed suicide in 2015 were in debt, the figure doubling from two in ten in 2014. The website said more rural households have gone into debt over 11 years, the average of rural households borrowing just over 100,000 rupees.
“What is distressing is that while small farmers pay exorbitant interest, wealthy farmers get subsidized credit,” said Soumya Kanti Ghosh, chief economic adviser, State Bank of India.
The government’s interest rate subsidy program is in place and provides loans to farmers at subsidized rates of seven percent and for early repayers at four percent. With the drying up of institutional credit, money lenders have fortunately replaced banks. The worrying thing is that a death or suicide does not exempt the rest of the family from repaying a loan. Ghosh says the lender’s money must be returned by the distraught family, unlike a bank loan which is cleared by the government’s waiver program. “As a result, problems exist in the hinterland,” Ghosh explains.
Nidhi and her sister live in perpetual fear. Anything can happen to their lives when the Singh brothers return. A 20,000 rupee loan from their mother has turned their lives upside down and they know their combined income is not enough to cover the interest charges.
And no one in the village is ready to guarantee the safety of the sisters.