Small loans to lifelong debt: Raj police bust loan-sharking racket worth crores

Jaipur: A moneylender was arrested in Jhalawar Friday and an FIR was filed against another after police uncovered what they called a ruthless loan-sharking operation that turned small loans into lifelong traps using compound interest, threats and signed blank cheques to keep borrowers — mostly poor and uneducated farmers — ensnared.

Police seized hundreds of vehicles, farm machinery and documents revealing financial exploitation worth several crores during the operation.

Superintendent of police Amit Kumar identified the arrested person as Sugan Chand Meena, 44, a resident of Khuri currently living in Aklera, who allegedly ran a ‘daandi byaaj’ (traditional money lending) racket that pushed borrowers into a cycle of mounting debt.

“Records seized from Meena show interest earnings of Rs 1.46 crore in 2023, Rs 1.83 crore in 2024 and Rs 2.56 crore in 2025,” Kumar said.

Officers said Meena used intimidation, hired collection agents and executed legal threats to enforce recovery, often targeting poor farmers, labourers and small traders.

During Friday’s operation, police recovered 521 signed blank cheques, 178 executed stamp papers, 14 registers, 143 diaries and nearly 3,000 slips detailing daily transactions — all part of a massive paper trail that exposed the scale and structure of the racket.

Officials said borrowers were initially offered small loans before being pushed into larger liabilities layered with compounded interest, penalties and fresh agreements.

In a separate action in the Dag police station area, Kumar said police registered a case against one Sunil Goyal, who is accused of running an organised-lending racket built on similar methods of coercion and document-based control.

Searches linked to the case led to the seizure of hundreds of vehicles and agricultural machines, including 70 tractors, 61 motorcycles and over 100 threshers, along with blank cheques, stamp papers and property documents allegedly used to pressure borrowers.

Police said many of the financed assets recovered were hidden to evade banks and recovery agencies, with equipment worth crores found lying unused and deteriorating.

Police said the two accused had collectively filed over 25 cases against borrowers to keep them in line.

“It is a case study of rural distress, where access to formal credit remains poor and desperation becomes the currency that illegal lenders trade in,” said a senior police official, adding that more such loan sharks are currently under the scanner.
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