Young girls in the northern Indian state of Rajasthan are being sold as “repayment” for loans their parents cannot afford, the national body that protects human rights has said. The National Human Rights Commission has issued a notice to the state government demanding a police inquiry and answers within a month to what it called an “abominable” practice. People living in many rural areas in India often have to borrow money from fellow villagers when a family member falls seriously ill and needs medical treatment. Local media reports say that in half a dozen districts around Bhilwara, if a family cannot repay a loan, the aggrieved creditor has complained to the “caste panchayats” or caste councils. By way of “settlement”, the councils have ordered the family to hand over their daughter – sometimes more than one depending on the size of the loan – so that the creditor can sell her to a trafficker to recoup his money. In its notice, the commission said that if the family refuses to sell their daughter, “their mothers are subjected to rape on the diktats of caste panchayats for the settlement of disputes”. Among the cases highlighted by the commission is that of a man who borrowed 1.5m rupees (£15,800) from a neighbour who was forced by the panchayat to sell his sister and 12-year-old daughter to settle the debt. In another, a man who borrowed 600,000 rupees (£6,300) when his wife fell ill and needed hospital treatment was unable to repay it. The panchayat compelled him to hand over his young daughter to the creditor, who later sold her to a trafficker in Agra. From there, “she was sold three times and became pregnant four times”, the commission said. The commission has sent an official to Rajasthan to investigate the cases. The Bhilwara district collector, Ashish Modi, said the crimes were the first of their kind. “They are total illegal. The police are investigating and we will make sure the victims get justice and the guilty are punished,” Modi said. Panchayats are often a profoundly regressive force in rural India, acting as kangaroo courts. They have ordered so-called honour killings of couples who have defied tradition by marrying into a different caste or faith or ordered brutal punishments for couples suspected of adultery. Kavita Srivastava, a veteran women’s rights activist in Jaipur, Rajasthan, said it was well known that caste panchayats informally regulated villagers’ personal matters such as marriage, inheritance or custody. If people defy their orders, they are ostracised and shunned by the rest of the community. “But what is new in these cases is that they seem to have expanded their ambit to settle loan disputes in this way,” Srivastava said.