In 2012, hard-pressed for cash, a Central government employee at the International Airport here borrowed Rs.3 lakh from a ‘blade’, local phraseology for loan sharks who lend money at usurious rates of interest and often use violence to recover it.
In the next 12 months, he took more loans and pawned his wife’s jewellery and paid the money lender several times the original amount. Often his monthly remittance to the ‘blade’ touched Rs.28,000. Still the money lender did not consider the loan closed and sent his goons to harass the man at his office and home. Last week, the moneylender’s goons trespassed into his house and threatened his wife and daughter. He lodged a complaint at the Thampanoor police station, which resulted in the arrest of three moneylenders in the city.
Circle Inspector, Sheen Tharayil, identified the accused as Vellayani Murukan, 55, and his business associates, Kadakampally Prakash, 38, and Ambalakunnil Vadivel, 40.
The police said a special drive against loan sharks was under way in the Fort Sub Division headed by Assistant Commissioner, K. S. Suresh.
Documents seized in earlier raids from moneylenders showed that they often charged an interest of up to Rs.1,000 a day on a loan of Rs.1 lakh, an annual interest rate of 360 per cent. Their clients ranged from the common man seeking urgent cash for treatment or conduct of social ceremonies such as weddings and funerals to those profiting from legal and illegal businesses.
The moneylenders often asked their clients to submit signed blank cheques, (preferably those issued in the name of their wives for easy coercion), promissory notes, stamp papers, and land deeds, as surety. In addition, they forced them to sign land sale agreements to show on record that the loan was actually an advance for the borrower’s property.
Most moneylenders kept their transactions secret and rarely registered or advertised their businesses to avoid taxes and legal scrutiny.
Early this year, the police had arrested four of their own men on the charge of running an underworld-linked money lending operation in the city. They had extended collateral-free “meter” loans, where interest is charged by the hour, and used their office and underworld contacts to make borrowers pay up.
So, far the racket has taken a heavy toll on urban society. It has fuelled crime, impoverished families, and driven many to suicide.