: The suicide of a debtor in Alappuzha last week seems to have given a fresh impetus to the government drive against moneylenders.
Threats from his creditor, a local loan shark, had caused the defaulter, a retired government employee, to take his life.
The death triggered a public outcry that prompted Home Minister Ramesh Chennithala to launch the second phase of Operation Kubera on Monday.
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The Minister’s hallmark drive against loan sharks, pawn brokers, and illegal chit funds was momentous at its start in 2014.
It resulted in the registration of 2,066 cases and hundreds of arrests. Huge amounts of unaccounted money and documents extorted from borrowers as surety were recovered in pre-dawn police raids.
Scores of moneylenders went bankrupt as they were unable to collect their debts.
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But, the drive lost momentum. Its critics alleged that the drive “deliberately” bypassed corporate-scale pawn brokers, unauthorised chit funds, and moneylenders to film producers and realtors.
Nationalised banks could not fill the void left by moneylenders.
Citizens seeking emergency loans had nowhere to turn to. Black-market money-lending revived rapidly in 2015.
This time, it went underground. Moneylending migrated from markets to residential areas, chiefly high rises. Documents received as surety were hidden in secret safe houses.
To pre-empt prosecution, loan sharks showed their credit as cash advance for their borrower’s property.
Transactions were conducted in secrecy and through frontmen.
The borrower rarely came into direct contact with his actual creditor.
The racket achieved a level of secrecy and anonymity comparable to hawala transactions. Recovery of debts was outsourced to musclemen.
The racket has also mutated. Many bid loan sharks hid their profits in foreign currency.
They stored their true books of account in cloud computing data storage centres inaccessible to investigators. Borrowers were increasingly required to compensate their creditors by cash to Dubai through hawala routes.
ADGP Arun Kumar Sinha was heading the drive. He has a drastically new situation to tackle, it seems.