KUALA LUMPUR: A special enforcement unit led by a senior police officer is being set up at the Housing and Local Government Ministry to crack down on “loan sharks.”
The unit, which comprises officers from the ministry and senior police officers, will conduct raids and surprise checks on both illegal and legal moneylending businesses.
The ministry’s Director of Licensing Mohd Hashim Saleh said the unit would also go after moneylenders who ‘advertised’ their business by placing stickers in public areas like on telephone booths, tree trunks and on car windscreens.
“Previously there was no enforcement carried out to check on illegal and legal moneylenders who abused the laws,” said Mohd Hashim.
It is learnt that stickers advertising loan shark services were also placed on the ministry’s building in Pusat Bandar Damansara.
He said those caught advertising illegally or flouting other regulations could be jailed and even whipped under the Moneylenders Act (Amendment) 2003.
“When the Act is gazetted, the ministry will also have the right to revoke licences of those who abuse the regulations.
“The draft copy of the regulations are in the final stages,” he told a press conference after meeting the Indian Chamber of Commerce and Industry Selangor (ICCIS) yesterday.
Mohd Hashim said a standard agreement, which would be used by all moneylenders, had been drafted and handed to the Attorney-General’s Chambers for approval.
“The agreement will protect the interest of the public (borrowers) and also licence holders,” he added.
The current 2,200 licence holders in the country will be required to adopt the new regulations. The licences of those who fail to do so will not be renewed.
Muguntha earlier met Housing and Local Government Minister Datuk Seri Ong Ka Ting and handed over a memorandum proposing a ceiling on borrowings from moneylenders.
ICCIS proposed a RM5,000 ceiling for non-collateral borrowings and to increase the prevailing interest rate of 1.5% per month to 3%.
Among the other proposals are to allow organisations like ICCIS and co-operatives to get moneylending licences and increase the paid-up capital of moneylenders to RM500,000.