2007-03-31
They have pass books, receipts and computerised accounts, and are run by gangsters. Local banks in Bihar's villages force farmers to take loans at high interest rates and beat them up when they default.
Twenty two year old Mumtaz has been confined to her house for the last three months. She has no idea where her parents are. She only knows they are hiding somewhere after defaulting on a loan taken from a local private bankrun by local goons and is called, appropriately enough, the Gunda Bank.
There are many families like Mumtaz's, in the northern districts of Bihar. Most of them are small farmers forced to take loans from Gunda Banks at very high rates. These banks work under the shadow of the gun, with no formal offices or branches but they do have a structured system in place.
People complain that they were beaten up badly by the goons. The goons threaten to kidnap young women. But where do these lenders actually get the money to operate?
An anonymous Gunda Bank operator states, “We get the money from extortion and kidnappings.”
The state's police, along with central agencies had tried earlier to break this moneylending network operated by criminals, but to no effect. Today, these Gunda Banks blatantly advertise on FM radio and yet, the government says it has no information on these banks.
The Dy SP of Naugachiya states, “Lenders and borrowers keep the matter between themselves. The police are never informed. This makes it very difficult for us to investigate.”
People sitting in the power corridors love to believe that Bihar has changed but for those at the receiving end of the system the change is too slow to benefit the person in the last tier of the society. And unless that happens, Gunda banks will continue to thrive.
There are many families like Mumtaz's, in the northern districts of Bihar. Most of them are small farmers forced to take loans from Gunda Banks at very high rates. These banks work under the shadow of the gun, with no formal offices or branches but they do have a structured system in place.
People complain that they were beaten up badly by the goons. The goons threaten to kidnap young women. But where do these lenders actually get the money to operate?
An anonymous Gunda Bank operator states, “We get the money from extortion and kidnappings.”
The state's police, along with central agencies had tried earlier to break this moneylending network operated by criminals, but to no effect. Today, these Gunda Banks blatantly advertise on FM radio and yet, the government says it has no information on these banks.
The Dy SP of Naugachiya states, “Lenders and borrowers keep the matter between themselves. The police are never informed. This makes it very difficult for us to investigate.”
People sitting in the power corridors love to believe that Bihar has changed but for those at the receiving end of the system the change is too slow to benefit the person in the last tier of the society. And unless that happens, Gunda banks will continue to thrive.
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