Illegal private financiers target \'defaulters\' in twin cities

Hyderabad: Several private finance companies from the twin cities are allegedly torturing gullible people for failing to repay the money with interest within the prescribed time. Some financers have gone to the extreme step of confining and torturing the ‘defaulters’.

Of late, unauthorised private financiers are coming up in almost every locality, offering loans against high-interest rates. In the Old City, there are ‘rahan centres’ where women extend loans against gold and property.

“We don't go to the houses of borrowers. They come to us to borrow money for business, domestic or other purposes. Many actually come with gold or property documents and mortgage them,” said Ruksana Begum, who runs a rahan centre in the Old City.

Many borrowers allege that illegal financiers run a syndicate, which has henchmen on their rolls.

Narrating his experience, Arun Rao, who runs a tiffin centre in LB Nagar, said, “When people like me approach the police help, we are told that it's a civil case.”

Private financiers are in demand because businesses have suffered heavily during the pandemic and banks shy away from lending to them.

“Financiers have been harassing their borrowers. But many avail of loans just to show off or spite their relatives,” said Abdul Haii, a religious leader. “A cousin of mine recently mortgaged his property and borrowed Rs 5 lakh and spent most of the money on his son’s birthday. Today, he has lost not only his house but his wife has deserted him along with their son. He is driving an autorickshaw,” he said.

Narrating a different experience, Abdul Khader Galeeni from Babanagar said that he was recently bitten by a monkey and I borrowed Rs 50,000 from a local financer to meet the medical costs. “When I failed to repay in time, he confined me in a room and bit me,” he said.

These financers charge more than 20 per cent interest and collect the interest on a monthly basis. At the time of lending money, they make the borrower sign a general power of attorney agreement, with the right to sell the mortgaged property.

Ranjit Singh, a former private financier who is now into real estate, said borrowers  should avoid mortgaging property. He said the financiers collect the general power of attorney (GPA) from the borrowers. “If it is their last resort, they read the GPA thoroughly, apart first verifying whether the financier has a money-lending licence,” he said.

Asked about the practice, a senior police officer from the Rachakonda commissionerate said, “Unable to bear the torture automobile financers, many of those who hypothecate their vehicles tend to change the vehicle number plates. We have seized many such vehicles.”

“The victim should report to the police station when harassed by financers. We will be conducting a special drive against illegal financers and take stern measures against them,” said another senior police officer.