A high-level commission to be formed by the government to address the concerns of loan sharking victims would face a herculean task in investigating all the cases within three months, a former chief of a similar commission said.

On Monday, the government and the protesting victims signed an agreement under which the government has pledged to set up the commission, which would collect evidence of loan sharking and recommend scrapping of fake loan documents and legal action against those involved in unscrupulous lending.

The three-member commission will be mandated to investigate issues such as whether the victims were forced to sign any documents that stated false amounts; whether the amounts were inflated; whether the lenders charged exorbitant interest rates; and whether similar other illegal activities had taken place.

The commission will study and collect such documents and categorise them based on their authenticity, including identifying forged or illegal documents. Then, it will forward the cases to the department of money laundering or the relevant government agencies.

It will be the second such commission to be formed by the government to investigate and address the concerns of loan shark victims.

According to Rudra Prasad Pandit, joint secretary at the Home Ministry, the commission will be given three months to complete these tasks.

“The commission to be formed will have an extensive mandate including to investigate individual cases,” said Gauri Bahadur Karki, former chair of the Special Court, who had earlier headed a similar commission. “But based on my experiences, it is difficult to gauge the true magnitude of loan sharking.”

He said that determining the guilt of lenders involved in loan sharking was challenging, because the lenders usually have several documents of lending while borrowers often lack any documents.

On the other hand, there are already plenty of complaints on loan sharking. But those participating in the protests claimed more such victims are yet to come forward. The previous commission had collected around 28,000 cases of loan sharking. Of them as many as 21,552 were from eight districts of Madhesh province.

Of the total complaints, 5,188 cases were settled through a compromise decree. According to the past commission, leaders agreed to accept a payment of Rs1.72 billion out of the total claims of Rs7.62 billion, substantially reducing the burden on loan shark victims. It took the commission eight months to settle over 5,000 cases through a compromise decree.

“There are already so many complaints registered and more complaints are likely to be registered with the new commission,” said Karki. “So, it will be a herculean task for the new commission to complete the task within the deadline.”

The government is forming the new commission in three months since the earlier commission submitted its report in December last year.

Pandit said the new commission had to be formed in order to address the grievances of the victims that the previous commission could not resolve. “It may take around a week to set it up. The Cabinet should form it,” he said.

Meanwhile, the agreement signed between the government and the loan shark victims on Tuesday does not mention anything about resolving the disputes through compromise decrees.

In fact, the previous commission led by Karki had recommended continuing the process of settling loan sharking disputes through compromise decrees by handing over the power to the chief district officers. However, after the commission handed over its report in December last year, there has been no progress in resolving the issue through compromise.

“In my view, there is a greater chance of loan shark victims getting justice through compromise decrees than legal proceedings,” said Karki. “This is because loan shark victims often lack evidence to prove that the lenders are indeed loan sharks even though loan sharking has been criminalised by amending existing laws.”

The Criminal Code 2017 and Civil Code 2017 was amended last year to criminalise loan sharking. As per the amended law, it is a crime to engage in the practice of lending money for interest through unfair transactions.

Pandit said there have been discussions about granting the new commission all the powers held by the earlier commission. “The new commission will have greater authority, including the ability to recommend criminal charges against suspected offenders,” he said.

The law terms forcible transfer of a debtor’s immovable property through the use of any threat or violence or exploitation for the purpose of debt recovery as an unfair transaction. Also, charging exorbitant interest to the extent that it exceeds the principal amount is a punishable crime. It has a provision that individuals who conduct transactions against the rules can face imprisonment for up to seven years and a fine of up to Rs70,000.

“It is also very difficult to prove loan sharking in the court,” said Karki.

Joint Secretary Pandit, who is the head of the government talks team, and Abadesh Prasad Kushawaha, chairman of the struggle committee, signed the agreement on Monday in the presence of Deputy Prime Minister and Home Minister Rabi Lamichhane, who had taken the initiative to resolve the issue through negotiations.

Hundreds of victims of usury—or ‘metre byaj’, as it is colloquially known in Nepal—arrived in Kathmandu by walking for days from faraway districts including Jhapa in the east and Kanchanpur in the west, two weeks ago, to put pressure on the authorities to resolve the problem.

They had been continuously staging protests near Singha Durbar, the central secretariat, and in front of Parliament building at Baneshwar since they came to the national capital.