New Delhi: Prakash Sarvankar, a 38 year old resident of Mumbai, took a loan of Rs. 50,000 from the bank earlier this year and was unable to repay the installments on time, due to failing health.

After being publicly humiliated and constantly harassed by loan recovery agents, Prakash hanged himself in his one-room Malpa Dongri residence, leaving a suicide note which stated that harassment by the recovery agents had forced him to take the drastic step.

This matter gained tremendous attention due to the media coverage and lots of questions were raised on the use of goonda elements and their high handed ways in recovering dues.

Cornered by the media and public outcry on the matter, ICICI bank announced an ex-gratia payment of Rs. 15.50 lakhs to the victim's family. "The payment would be made in the form of a fixed deposit worth Rs 10 lakh and an insurance policy worth Rs 5.5 lakh, totally amounting to Rs 15.5 lakhs," said an ICICI bank spokesperson.

Acting further in this matter, the ICICI bank has terminated the services of Nishant Associates, the recovery agency involved in this incident. Three members of the agency including the owner and an ICICI bank employee were taken into police custody.

The relief to the victim's family will involve an insurance plan, which will offer a life cover of Rs. 25 lakhs over a period of 20 years. ICICI bank will pay all the premiums for the plan.

RBI has also taken a strict note of the recent spurt in such cases. It is formulating guidelines on how the banks should proceed when they take the services of a recovery agency and what all steps should be taken to recruit people into such agencies.

RBI has stressed on immediate steps to weed out the criminals and anti-social elements from the loan recovery infrastructure of banks.

RBI has suggested that banks should prominently display the names of the associated recovery agencies on its website and asked the recovery agencies to conduct extensive background check on all its employees, including police verification.