Comments
Usurious interest rates, innuendoes of sex scandals and political shenanigans… The call money racket in Andhra Pradesh is getting murkier and murkier.
Tales abound of ₹5,000 loans soaring to ₹1 lakh in just one year and sexual harassment of women unable to repay loans. The Police Commissioner’s office here has been inundated with complaints on the excesses of moneylenders.
The victims range from the person next door to businessmen and small investors
While in banking parlance, call money is short-term finance for periods ranging from one to fifteen days and mainly a inter-bank deal, the term is now in liberal use for the personal loans taken by individuals from money-lenders at 20-30 per cent per annum and often at even higher rates.
According to both victims and police sources, credit from the formal sector has dried up with banks tightening up and insisting on Cibil credit scores before lending. With over 9 million defaulters, Micro-Finance Institutions have also turned stricter in lending.
Concern While there is nothing new about money-lending, the twist in the tale is the alleged involvement of politicians and even some from the Police Department and the strong-arm tactics used by them to grab the properties of the indigent borrowers. For instance, according to one of the complaints filed, Kola Durga has lost 450 acres and a house as she could not repay a ₹2-lakh loan taken at 20 per cent.
“The new capital in the making and the steep rise in real estate prices have fuelled the appetite of money-lenders who take land and other property as security and then usurp them when people fail to repay,’’ a senior police officer involved in the investigation told BusinessLine .
Going by the seized promissory notes and cheques, the police suspect that the size of the ‘call money’ racket in the region of ₹1,000 crore. However, there is official word yet, on this figure. According to official data, some 150 cases have been registered in various different districts of AP till date, with the bulk of them from Vijayawada. About 125 money-lenders have been arrested. Raids on money-lenders are still on.
Many of those arrested have political background cutting across the spectrum — from the ruling Telugu Desam Party, to the YSR Congress Party and the Congress.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.