In-spite of RBI guidelines, recovery agents of number of Private Banks’ harass defaulters the age-old way
Nagpur: Debt Recovery Agents of HDB Financial Services entered a house in Nandanvan area and beat-up the debtor. A case has been lodged in Sakaradhara Police Station. The victim is identified as Pradeep a resident of Reshimbagh area. According to sources, Pradeep had borrowed a loan of Rs two lakhs from a private bank named HDP Financial Services three years ago. However, since Pradeep could not repay the loan amount nor did he pay the interest accruing from on the loan amount, the Debt Recovery Agents of HDB Financial Services entered a house in Nandanvan area and thrashed the debtor Pradeep.
RBI ombudsman claim reduction of physical assault of debtors
In the years since, banks appear to have taken some steps to stop recovery agents from attacking customers. In recent years, the cases of physical assault of debtors appear to have been significantly reduced; the RBI ombudsman also reports that complaints against recovery agents have dwindled significantly. Most recovery agencies have also become more professional given the strict guidelines framed by the RBI. The central bank mandates that a person can be employed as a recovery agent only after he completes 100 hours of training and passes a written exam on debt recovery. However, despite these improvements, a significant number of debtors in the country continue to get abusive calls from recovery agents.
In order to educate the borrowers, Nagpur Today has taken out a small extract from the RBI Guidelines for recovery Agents while recovering loans from debtors.
* Banks, as principals, are responsible for the actions of their agents. Hence, they should ensure that their agents engaged for recovery of their dues should strictly adhere to the above guidelines and instructions, including the BCSBI Code, while engaged in the process of recovery of dues.
* Complaints received by Reserve Bank regarding violation of the guidelines and adoption of abusive practices followed by banks’ recovery agents would be viewed seriously. Reserve Bank may consider imposing a ban on a bank, from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period. In case of persistent breach of above guidelines, Reserve Bank may consider extending the period of ban or the area of ban. Similar supervisory action could be attracted when the High Courts or the Supreme Court pass strictures or impose penalties against any bank or its Directors/ Officers/ agents with regard to policy, practice and procedure related to the recovery process.
* It is expected that banks would, in the normal course ensure that their employees also adhere to the above guidelines during the loan recovery process.