Nepali Law A complete legal information portal
The “Improper Transaction” offense, also known as the “Meter Byaj” means compound interest offense. Offenses relating to Improper Transactions have been criminalized by amending National Codes to address this issue.
This article aims to shed light on this understanding “Meter Byaj” issue, examining its origins, implications, and suggestions. We can better understand the measures required to achieve economic stability in Nepal, by delving into the complexities of this problem.
Understanding Meter Byaj Offense
Meter Byaj, which translates to “compound interest” in English, refers to the practice of charging excessive or exploitative interest rates on loans and financial transactions. This situation is particularly prevalent in the informal transaction sector, where individuals and small businesses often find themselves seeking credit due to limited access to formal banking channels.
The roots of the Meter Byaj offense can be traced back to the inadequate regulation of the informal financial sector in Nepal. Despite the presence of formal banks and financial institutions, a significant portion of the population, especially in rural areas, still relies on informal lenders due to a lack of awareness, stringent loan requirements, or the inability to meet collateral demands. The informal lenders, taking advantage of this vulnerability, impose exorbitant interest rates, which can sometimes reach as high as 36-120% per annum.
Implications of Meter Byaj Offense
Financial Exploitation: The primary consequence of Meter Byaj’s offense is the exploitation of vulnerable borrowers who are already struggling to make ends meet. High interest rates can lead borrowers into a never-ending cycle of debt, aggravating their financial distress.
Poverty Traps: As individuals and small businesses suffer the burden of high interest rates, they face significant challenges in repaying debt. As a result, this hampers socio-economic progress in a vicious cycle of poverty.
Reduced Investment and Productivity: The high cost of borrowing inhibits investment in productive ventures and business expansion, leading to a decline in economic productivity and growth.
Financial Exclusion: The prevalence of the Meter Byaj offense discourages people from engaging with the formal banking sector, perpetuating financial exclusion and limiting the potential for economic development.
Social Tensions: As borrowers struggle with debt repayment, disputes and conflicts between lenders and borrowers can escalate, leading to social tensions within communities.
Addressing the Issue
Strengthening Regulatory Framework: One of the primary steps in combating the Meter Byaj offense is the establishment of a robust regulatory framework to oversee the informal lending sector. Stricter regulations on interest rates, registration requirements for lenders, and mandatory reporting of lending activities can help protect borrowers.
Financial Literacy Programs: Educating borrowers about their rights and available financial services can empower them to make informed decisions. Government and non-government organizations can collaborate to implement financial literacy programs, particularly targeting rural communities.
Promoting Microfinance Institutions: Supporting microfinance institutions can provide access to credit at reasonable interest rates for low-income individuals and small businesses. These institutions often have a strong presence in rural areas and understand the specific needs of their clients.
Encouraging Formal Banking: Encouraging people to use formal banking channels can foster financial inclusion and minimize reliance on informal lenders. Simplifying account opening procedures and reducing collateral requirements can make formal banking more accessible.
Debt Restructuring and Relief: Implementing debt restructuring and relief programs for borrowers burdened by high-interest loans can offer them a chance to regain financial stability and dignity.
Public Awareness Campaigns: Launching public awareness campaigns to raise awareness about the dangers of Meter Byaj offense and its illegal nature can deter both lenders and borrowers from engaging in such practices.
Therefore, the Meter Byaj offense is a pressing issue that requires immediate attention from policymakers, regulators, and society at large. Nepal can unlock the full potential of its citizens, promote economic growth, and build a more economically inclusive society by effectively addressing this issue. The road to economic stability begins with eradicating exploitative lending practices and promoting responsible financial conduct for a brighter and more prosperous future for Nepal.
Yadi yo crime ho vane haamro Desh ko kaanun anusaar ta bank bata loan lida pani ta tyastai hunx Ani k bank lai meter byaj ko case kina laagdaina tiyo maathi ni mudda uthaaunu paro ni. Ek tarfi kura sunera kaanun banaaune Ani kanun ma vane anusaar ta Paisa line ko kura lai sunne rey woosle j vane tehi hune tyasto garo vane ta ko Rini le vanxa ki ma Paisa leko xu direct nai van dinx ni maanxe lai ta jabardasti kar garera Paisa le ki le vaneko ta haina Ani yasto garo vane dhani le suicide na gari k garxan ta haamro Desh ko kaanun ahile ek tarfa vako x ra ahile rule of law haina rule by law chalaaudai chan . Ahile ta Paisa line le direct vanx maile leko xuina Paisa ya ta vanx maile Paisa tiri sake vanera Ani tyasta ko kura lai maane tyasta maathi biswas garne Ani aru lai suicide garna majboor garne yo insaaf vayena ni ya ta duwai paksha lai sunnu Ani kanoon banaaunu ya ta bank haru Pani band garnu law bano vane sab lai equal priority dinu parx ni na ki euta lai matra Herne auta ko kura matra sunera faisala garne.
lenders can give loans by creating proper legal document and signing by both parties in woda. It should be mentioned that interest rate should be as per the market rate(13-15)%. If this is done in proper legal way in correct interest rate then that does not count in meter byaji.