Bankers concerned on RBI loan recovery guidelines
By Neelima Shankar
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Few recent incidents, which were blatantly outrageous and unlawful have prompted sharp reactions from the RBI, which later formulated guidelines for loan recovery agents and a strict warning of banning the recovery agents if the banks didn't follow them diligently. But many  banker's feel that the whole process of loan recovery can't be put in a formal framework or bound by guidelines due to the inherent nature of the work involved. Any such step could encroach on the autonomy of the banks and hamper recovery efforts.

However subtle it may be but loan recovery will always involve some element of pressure and coercion because it involves a borrower who has defaulted and the money has to be recovered from him. Bankers believe that without sufficient incentives and targets, the recovery procedure won't be possible at all. Loan recovery process is just like another job where targets are set and incentives are paid to those who achieve the targets. But all this should be within the legal framework and a line should be drawn between the acceptable and the avoidable.

 The RBI guidelines that every borrower should be informed about the loan recovery agents, only one number should be used to make recovery calls, borrowers shouldn't be contacted during odd hours and the process should be carried in a 'civilized' way are definitely good but leave much room for manipulation.

A defaulter will definitely avoid phone calls and will have to be pursued to get back the money. This will often involve some tracing and tracking of the borrower even if it means contacting him at odd hours. Another concern of the bankers is that willful defaulters will use these guidelines to get around the entire loan recovery process by crying foul every time they are confronted by such efforts. They can claim being harassed by the agents whenever they are reminded about overdues or default.

What needs to be understood here is that loan recovery is an essential part of lending process and adherence to the rule of law and avoidance of intimidation and questionable methods will definitely help. Properly trained loan recovery officers following the RBI's guidelines in both letter and spirit, will help rebuild the confidence among borrowers.

(Comments Posted : 13) Post Your Comments
1. Sir, my father has taken personal loan and loan on credit card without our notice from several banks and now he is absconding.My father is a habitual offender and he has gone missing 7 times in the past by taking loan from private parties and this is the first time he has taken loan from private banks. Bank people are calling me and harassing me to take care of the loan. I have filed a missing complaint with the police station on my father. Kindly advice.
L.M.PRAVEEN KUMAR (Posted: May 12, 2009)
2. sir,i had taken personal loan from icici bank for last four months i could not make payment,when i recieved payment from my parties i paid 2 months due rs 11086 by chq no 480513 and i told them i will pay the balance amount as soon as possible but the executive daily coming to home and shouting infront of home actually iam out of station several times i told him not to use bad words but he is regularly using it and he is threatening me if i didnt pay with in two days means he will bring some peoples to collect the money i dont know what to do
senthil kumar (Posted: Apr 24, 2009)
3. my wife took PL from hsbc bank and recently she was on maternity leave for 3months.due to over expenditure we could not our regular EMI. Even my wife is on leave recovery people are listening to us and they are harassing our family members for the payment. Due to this disturbances has started in our family and these executive are harrasing every month for the payment kindly guide us we are thinking of complaining to the police and to the bank as wel.
venkat (Posted: Oct 26, 2008)
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