RBI thinking of banning loan recovery agents

Mar 11, 2008 Personal Finance

The RBI is mulling action against the practice of hiring loan recovery agents by banks. It could also lead to a permanent ban, as was informed to the Rajya Sabha by MoS for Finance, Pawan Kumar Bansal. He also said RBI has taken up the complaints regarding the use of coercive practices by recovery agents with some banks for appropriate action.

The guidelines also stipulate that the recovery agents would not humiliate publicly or intrude upon the privacy of the debtors, their family members, referees and friends, make threatening and anonymous calls or make false and misleading representation.

It may be recalled that recently, goons in the pay of ICICI Bank were in the news for dragging a person out of a financed car and thrashing him, regardless of the fact that he was not the actual borrower.

Bottom line : Neither a borrower nor a lender be !!

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Akshay Mangat

I was once working in this business. Putting blame on banks alone is not the solution to this problem. What I saw many times is that people take loans and then find ways to avoid paying. Action is taken only after many reminders are given and only as a last resort. All of us are not goondas and hooligans.

For some agents, the commission they get from recovery of loans is the only way to run their family. The govt should try and regulate such activities before banning them.
Akshay Mangat

I was once working in this business. Putting blame on banks alone is not the solution to this problem. What I saw many times is that people take loans and then find ways to avoid paying. Action is taken only after many reminders are given and only as a last resort. All of us are not goondas and hooligans.

For some agents, the commission they get from recovery of loans is the only way to run their family. The govt should try and regulate such activities before banning them.