‘Lost our mother over Rs 1,000 debt’: Punjab family's loss highlights terror of loan sharks

In a heart-rending incident that has shocked the residents of Nangal town in Ropar district, a 45-year-old widow, Ranjana Devi, ended her life after allegedly being harassed by recovery agents from a private finance company. The woman jumped into the Nangal hydel canal on Wednesday evening after repeated threats from recovery agents who were harassing her to repay a small remaining loan balance of Rs 1,000.

Ranjana Devi, a widow and mother of two daughters, made her living by stitching clothes at home.

Her elder daughter, Anchal, told The Tribune that her mother had taken a loan of about Rs 30,000 from a private finance company based in Una district of Himachal Pradesh to buy a sewing machine.

“She repaid the amount through a middle-woman who had arranged the loan, but recently, some recovery agents started visiting our house, saying the loan was unpaid. My mother could not trace the middle woman and agreed to repay again, but she was short Rs 1,000. The agents abused and pushed her. Terrified and humiliated, she jumped into the canal,” said a tearful Anchal, now left to fend for herself along with her younger sister.

The incident has triggered public outrage, exposing how a network of illegal and unregulated private financiers continues to operate in the region, exploiting poor borrowers desperate for small loans. Advocate Paramjit Singh Pamma said such companies operating in the region were charging exorbitant interest rates ranging up to 5 and 10 per cent per month, effectively 60 to 120 per cent annually, in clear violation of Reserve Bank of India (RBI) guidelines.

“These agents recover money through threats and intimidation, and in some cases, they even pressure government employees by approaching drawing and disbursing officers. It's a well-established nexus of exploitation,” he alleged.

Following the incident, Anchal has lodged a complaint at the Nangal police station, naming three recovery agents: Shubam, Sagar and Abhishek, who were working for Satya Finance Company of Una district. SSP Ropar, Gulneet Singh Khurana, said the police had begun investigating the case and that strict legal action would be taken against the accused finance company and its agents.

The Reserve Bank of India regulates all registered Non-Banking Financial Companies (NBFCs) and Micro-Finance Institutions (MFIs) under the Regulatory Framework for Microfinance Loans, 2022. The RBI mandates that all microfinance loans must be collateral-free and issued only to households earning up to Rs 3 lakh per year. The RBI rules state that the borrower’s total repayment obligations (including all loans) must not exceed 50 per cent of their monthly income, ensuring they are not over-burdened.

RBI has also issued guidelines that all recovery agents employed by regulated institutions are required to follow a Code of Conduct for Recovery Practices, under which no harassment, threats, or physical intimidation are permitted. Experts say this case exposes a systemic gap between regulation and enforcement. Despite the RBI’s detailed rules, local administrations often fail to identify and prosecute unlicensed financiers.

The suicide has sparked calls for immediate action not only to punish those responsible but also to map the entire network of informal financiers operating in the region.

For Anchal and her sister, however, justice may come too late. “We lost our mother for just Rs 1,000,” she said.