A person took a loan of Rs 1.7 crore in Singapore. Due to 4% monthly interest and penalty, this loan became Rs 146 crore in 4 years. He had to sell his house. The court called it ‘conscience shocking’ and ordered an investigation.
bladeThose giving money on interest under names like , Vatti, Patta are still active in villages and towns. The government tries to stop such illegal transactions by making laws, but as long as there are needy people, this business continues to flourish, avoiding legal complications. Many people have lost both their lives and lives by taking loans from such private moneylenders. One such story has emerged from Singapore.
Took 1.7 crores, paid 146 crores
According to the report of The Straits Times, a Singapore citizen had taken a loan of 2,50,000 Singapore dollars (about Rs 1.7 crore) from a money lending company. After just 4 years, it had to pay around 21 million Singapore dollars (about Rs 146 crore) due to huge interest rates and other penalties. The report also says that he had to sell his house to repay the money. The man, who has not been named, had borrowed Rs 1.7 crore from a licensed moneylending company between 2010 and 2011.
web of interest
The company was charging interest rate of 4% every month. Along with this, there was also a late payment penalty of 8% every month. On top of all this, a late payment processing fee of Singapore Dollar 2,500 (approximately Rs 1,74,000) was also imposed every month on the initial loan. In just four years, due to all these charges and huge interest rates, his loan increased from Rs 1.7 crore to Rs 146 crore. In July 2016, he started finding it difficult to pay the installments. After this he sold his house to the director of a money lending company for Rs 14 crore. Besides, he also made an agreement with the director to pay rent ranging from Rs 4.90 lakh to Rs 5.95 lakh every month. But, the debt kept increasing. By the end of 2021, the debt increased to Rs 148 crore.
The judge also raised questions
When the debt increased further, he refused to pay rent and vacate the house he had sold to the director. After this, the matter reached the district court between the money lending company and that person. It is said in the report that after this this incident came to the fore to the world. Then, High Court Judge Philip Jayaratnam ordered an investigation whether there was anything illegal in the loan agreement and the rent agreement. The judge said that charging such a huge amount in the name of interest is ‘conscience shocking’. The report also states that further investigation into the matter is underway and the case has sparked a major debate on the ethical aspects of charging interest on money.