LAHORE, June 12: Private money lending, individually or collectively, will be a non-bailable offence in Punjab and the violator will get up to 10 years of imprisonment with a Rs500,000 fine or both.
The Punjab Prohibition of Private Money Bill 2003 is the first private bill made an act by the provincial assembly during the last four years.
Its passage on Tuesday repealed the Punjab Money Lending Ordinance 1960 under which the practice to lend money by individuals to people on interest was legal after obtaining a licence from the Revenue Department.
Moved by Mrs Humaira Awais Shahid, the bill was referred to the PA standing committee on revenue, relief and consolidation on July 31, 2003. The committee considered the bill during its 18 meetings since Nov 11, 2003.
During the meetings, the Punjab Revenue Department, was of the view that the complete prohibition of money lending would be against the interest of the general public. The Punjab Money Lending Ordinance 1960 was in conformity with the corresponding fundamental rights guaranteed by Article 18 of the 1973 Constitution.
The law department opined that merely stating that the 1960 Ordinance was in conformity with the fundamental rights guaranteed in the 1973 Constitution was not sufficient when it had been expressed before the committee that the 1960 Ordinance was not operative throughout the province.
The 1960 law, the revenue department argued, was under adjudication in the Federal Shariat Court and the standing committee may wait the decision.
The law department was of the view that the decision of the Shariat Appellate Bench of the Supreme Court in the review petition titled UBL vs M/s Farooq Brothers and others was not a bar for the consideration of the bill.
Regarding the revenue department stance that the proposed legislation be kept pending till the receipt of the instructions from the provincial cabinet, the law department opined that the PA standing committee was competent to consider or suggest recommendations on the bill, without waiting for the cabinet instructions.
Talking to newsmen at the assembly cafeteria later, MPA Humaira Awais Shahid vowed to launch a vigorous campaign to create awareness among the masses against the private money lenders.
“With the support of my colleagues in the PA, I’ll try to pursue every case against the private money lenders brought to my knowledge,” she said.
The money lenders, she said, had been receiving 140 to 200 per cent more from people in return to what amount of money was actually given. “They are looting the masses by charging compound interest from the people. There are reports that people had to sell their daughters while women had to resort to prostitution to pay the interest of the money lenders.
“It’s a human issue and the only object to single-handedly pursue the bill had been to save people from this cruelty and worst form of exploitation,” said the MPA who moved the Punjab Prohibition of Private Money Lending Bill in 2003.
During the PA Standing Committee meetings spanning over three-and-a-half years, the Revenue Department could not give solid reasons to avoid the legislation except using delaying tactics. “I challenged the department during a meeting to give an example of the cancellation of the licence of a single private money lender for violation of the 1960 Ordinance according to which a licensed money lender can not receive more than five per cent interest on the money lent. Many people were forced by the money lender to leave their towns and cities.”
Mrs Shahid said according to the Banking Company Ordinance 1990, no public or private limited company could act as a bank. “Can individuals be allowed to perform such functions as are prohibited under the 1990 Ordinance?” she asked.
Money lending for the purpose of earning interest was prohibited under the injunctions of Islam.
Enforcement of the new law, maintained the MPA, would create space for micro-credit financing that should be encouraged through financial institutions and non-government organisations.