The Commission of Inquiry on Unfair Transactions (Meter-Interest), 2081 has submitted its performance report to the Ministry of Home Affairs, presenting the existing situation, major problems and proposed solutions to predatory informal lending. The report describes meter-interest as a serious social and economic problem particularly affecting poor and financially vulnerable borrowers. Practices identified include charging excessive or continuously increasing interest, making borrowers sign documents for amounts higher than the actual loan, taking blank cheques or other documents as security, and using land, houses or other property as collateral in ways that can ultimately deprive borrowers of their assets.
The commission worked through district administrations to collect complaints, investigate disputes and encourage settlements between borrowers and lenders. Its annexes provide district-wise records of complaints and settlements, showing that cases were heavily concentrated in a smaller number of districts, particularly in the Madhesh and Terai regions, while many districts reported comparatively few or no complaints. The report says resolution efforts have been complicated by missing or unreliable transaction records, parties remaining out of contact, property already having changed ownership, conflicting claims over principal and interest, and difficulties establishing the true amount originally borrowed and repaid.
The commission identifies several deeper causes behind the problem, including limited access to banks and financial institutions, poverty, unemployment, financial illiteracy and urgent household needs that force people to depend on informal lenders. It also points to legal and institutional weaknesses, inconsistent implementation between districts, insufficient specialist manpower, weak coordination and social pressure on victims. The report argues that the problem cannot be solved through criminal enforcement alone and requires a combination of legal, financial, administrative and social measures.
Among its major recommendations, the commission proposes clearer and stronger legal provisions defining unfair transactions, a permanent and coordinated mechanism for handling meter-interest complaints, strengthened district-level help desks and case-management systems, better legal and administrative protection for victims, and stronger cooperation between district administrations and police. It also recommends expanding affordable formal credit, improving financial literacy, strengthening rural access to banks, supporting economically vulnerable borrowers, and using local governments for prevention and public awareness. The report additionally contains proposed legal amendments, operational guidelines, complaint forms and other administrative tools intended to institutionalize the government’s response to meter-interest cases.
