Lenders to face 5-year jail, fines for harassing debtors now

KARACHI: Sindh Governor Kamran Tessori signed the Sindh Private Loans Bill 2023, enabling imposition of strict penalties against private lenders providing interest-based loans and harassing debtors, ARY News reported on Sunday.

Under the new legislation, Sindh Private Loans Bill 2023 allowed the imposition of strict legal actions against private lenders. The private lenders will face five-year jail term and up to Rs500,000 fines if found guilty of harassing the debtors.

The legislation was approved after the rising cases of suicides among debtors who acquired loans from private lenders including online loan apps, allegedly blackmailing and harassing them.

READ: FIA launches probe into online loan app blackmailing case

Under the new law, the authorities can confiscate the properties of an individual or company which is involved in facilitating interest-based financing. It enables the imposition of strict penalties against those who are found receiving even a single penny after providing loans.

Sindh Governor Kamran Tessori advised the citizens to immediately inform the government about the usurers for carrying out strict actions against them. He added that the interest-based moneylenders will face strict legal actions over the complaints of the nationals.

Debtor’s suicide

A few days ago, the father-of-two Muhammad Masood in Rawalpindi had committed suicide after being blackmailed by an online loan company.

READ: Online loan apps: FIA arrests nine ‘blackmailers’

A 42-year-old man namely Muhammad Masood had acquired Rs22,000 – a resident of Rawalpindi’s Chakra area – from an online loan company. The people running the online loan company started blackmailing Masood.

After being fed up, Muhammad Masood committed suicide and recorded an audio clip before claiming his own life.

In his recorded audio clip, Masood was saying, “I am so sorry. I failed to be a good person for you, children nor I even became a good son. I have to return loaned money to a lot of people with interests. They made my life a living hell.”

READ: Online loan apps: Here’s how citizens are ‘blackmailed’

A case was lodged at the Race Course station by the deceased man’s brother. He stated in the First Information Report (FIR) that the people running the online loan company was blackmailing Masood by threatening women of his family and data leak.

The family revealed that Masood had acquired a small loan from an online company which he failed to return in the given timeframe. The online loan company kept increasing the interest rate each month and later they demanded millions in return.

In June, a few victims of such online loan apps scam while talking to ARY News’ programme Sar-e-Aam, share their painful stories.