NEWS & ADVICE : CAR LOANS
ICICI Bank warned by RBI over improper loan recovery methods
By Neelima Shankar
Nov 21, 2007
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New Delhi: ICICI Bank has been warned of stern action by the Reserve Bank of India (RBI), if the incidents of coercive methods by recovery agents of the bank occur again. This was informed to Rajya Sabha, the upper house of Indian Parliament, in a written reply by Minister of State for Finance, P K Bansal.

RBI was asked to investigate the recent excesses committed by the bank's recovery agents and take action against those who were guilty. A system of appointing and reviewing the performance of the loan recovery agents was also to be formulated by RBI.

Replying to a question in Rajya Sabha, the Minister said that the the customer who took a car loan from ICICI Bank and was harassed had filed a case under Section 308 (attempt to commit culpable homicide) of the Indian Penal Code with the IP Estate Police Station in New Delhi. The three accused were arrested and later released on bail. 

A consumer court in Delhi had earlier fined the ICICI Bank Rs. 51 lakhs on attacking a customer and taking forceful possession of his vehicle. The consumer court had ordered the bank to compensate the victim by paying him Rs. 5 lakhs.  

RBI had earlier threatened to bring in the Lender Liability Bill to stop banks from charging excessively and enforce proper loan recovery methods. Clarifying this point, the Minister informed that the government has not received any proposal from the Reserve Bank to bring Lender Liability Bill.

Replying to another question in the house, P Chidambaram, the Finance Minister of India had said that the banks will be completely responsible for any or all acts of omission and commission by their recovery agents. The Indian Banks Association (IBA) had also stressed the need of proper training of loan recovery agents and recovery methods that complied with the law of the land.

The Reserve Bank of India (RBI) was established on April 1, 1935 as per the Reserve Bank of India Act, 1934. Though originally privately owned, it has been fully owned by the Government of India since it was nationalized in 1949. Acting as the apex banking regulator, RBI reserves the right to impose penalty on a bank for violation of guidelines under the provision of Banking Regulation Act, 1949.


(Comments Posted : 2) Post Your Comments
1. my husband has taken vehicle loan on innova from h.d.f.c. bank. we have to pay 3emi. we are ready to give one emi but the bank has send goondas to our place and are harassing us.we had gone to police station to file a complaint against them .kindly help us
seema sawant (Posted: Jun 26, 2008)
2. RBI took right decision and should also formulate the policy for recovery of defaulted loan.
Sultan (Posted: Nov 22, 2007)
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