Loan agents harass single women , disregard RBI guidelines

In a recent case Priya Kulkarni, who is a teacher at a school for mentally challenged children in the island city of Mumbai has been harassed by the recovery agents of the bank. Few years ago she had taken a personal loan of Rs1 lakh from a leading foreign bank to pay for the treatment of her ailing mother. But due to various reasons, she had been unable to keep up with the repayments. In turn the bank sent recovery agents to lose on her.

Priya is the only bread earner for the family but has to stop teaching as the agents were creating nuisance at the school as well. She told the recovery agents said, “Agar paisa nahin hai to dhanda karke do (if you do not have money, then resort to prostitution to pay us),’in front of my principal and other colleagues.

She said, “I am not in a mindset to take care of my students because of this harassment”. The agents keep calling up even at home.

While the Reserve Bank of India’s guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks, issued in November 2006, say: “The bank and their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the debtors’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations.”

Even the Banking Codes and Standards Board of India’s ‘Code of Bank’s Commitment to Customers’ (CBCC) also clearly states, “During visits to your place for dues collection, decency and decorum would be maintained.”

But then also the recovery agents are not following this. Despite of the stringent RBI guidelines, the recovery agent nuisance is far from controlled.

Kulkarni had already paid the bank Rs1.94 lakh on a loan of Rs 1 lakh. As the interest rate being charged is so high that her repayment is still not over. She had approached the bank for rescheduling the loan but bank rejected her request.

“One day, the agents came in the evening and stayed put for 2.5 hours and said, ‘We will stay here. You can cook and make arrangements for us.’ When I told them that I have spoken to the nodal officer of the RBI, they retorted, ‘Did RBI give you the money?” Kulkarni told DNA.

There is one more case of harassment by the recovery agents. Dombivli resident Surekha Sathe lost her husband last Diwali. Since his death recovery agents have been troubling even late in the night. Sathe told, “They come and sit in my house for more than two hours after 8pm. I live alone after my husband’s death”.
It is clearly mentioned in the CBCC that the bank’s representatives will contact the customer between 7 am and 7 pm “unless special circumstances of your business require otherwise”.

The recovery agents are of a leading new generation private sector bank and they want her to repay outstanding debt on her husband’s credit card. The bank cannot recover the amount from Sathe, who has submitted her husband’s death certificate to the bank. “I have even written to the banking ombudsman stating that it is not my liability,” she adds.

But then also the recovery agents still keep troubling Sathe and threaten to even disturb her neighbors. “After my husband passed away, I have taken up teaching pre-school students and the agents keep calling during the school hours. It is quite disturbing,” she says. After this she registered a complaint with the police and since then the phone calls have stopped.

It shows that new generation private sector banks and foreign banks have a clear disregard for RBI guidelines. Parag Shah, chief executive officer of recovery agent firm Adikrut Japti Avam Vasuli, says, “As a matter of policy we work for public sector banks only and we have no pressures. We do not work for private sector banks as our mindset does not go in tandem with theirs,” he says.

However bankers told that they comply by the guidelines of the CBCC. “We already have a code of conduct. Like public sector banks, we also have to follow it strictly. If we come across any instance of harassment by recovery agents, we talk to them and, if needed, terminate their services,” says AP Bundellu, deputy managing director, retail, at IDBI bank.