The Government on Monday in Lok Sabha clarified that banks do not have the right to appoint bouncers for forceful recovery of loans.
It was stated by Union Minister of State for Finance Anurag Thakur during Question Hour in the House. He said adequate measures have been taken to prevent misbehaviour from loan borrowers.
‘For this, the guidelines issued in relation to the Fair Practices Code for the borrowers of the Reserve Bank of India are very clear,’ the Minister said.
In written reply to a question, the Minister said RBI has also issued ‘Guidelines on Fair Practices Code for Lenders’ which are required to be adopted by banks, duly approved by their Board. ‘The said circular prohibits lenders from resorting to undue harassment in recovering loans, viz, persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc,’ the Minister said.
‘With regard to complaints, the RBI has informed that complaints received by it regarding violation of the said guidelines and abusive practices followed by banks’ recovery agents are viewed seriously. In such cases, RBI can consider banning the bank concerned from engaging recovery agents in a particular area for a specified period.In case of persistent breach of above guidelines, RBI can also consider extending the period or the area where the bank concerned is barred from engaging recovery agents,’ the Minister added.
