Loan sharks
Unlimited credit for that car you always wanted. Personal loans for the asking. The Indian consumer has never had it so good. But this rosy picture turns gloomy in the case of even a minor default. Yogesh Tiwari delves into the menace of unlawful loan recovery...
Y Yadaiah, a 42-year-old state government employee in Hyderabad, died when he was wrongfully confined and tortured by Elite Financial Services, a recovery agent of ICICI Bank. He was picked up from a bus stop near his office on June 22 and forcibly taken to the agent’s office for recovery of a loan of Rs 15,000.
Suresh Babu, a resident of Bangalore, took a two-wheeler loan from ICICI Bank and paid all the dues. In March 2007 the bank deducted the loan amount twice through the electronic clearance system (ECS). As they deducted money twice he did not clear the dues for the month of April. Then followed a visit by two people to his residence demanding money for the months of March and April. They did not have any identification card or any letter. They started harassing him and told him to pay the outstanding amount.
Iqbal Singh took a car loan from HDFC Bank in Delhi. Somehow, he defaulted on two installments. He later informed the bank officials that he now had sufficient funds in his account and he was willing to pay the outstanding amount. The officials asked him to visit their office. When his daughter-in-law went there the bank officials confiscated the car and told her to pay the total balance loan amount plus Rs 15,000 as crane charges. The officials harassed him over the phone and used filthy language.Now, even after paying all the dues the bank has not issued the no dues certificate (NOC) to Singh. He has filed a case to get the NOC and the amount he has overpaid.
Jatin Shah, a resident of Vadodara, Gujarat, took a credit card from ABN-AMRO Bank. He returned the same as per their advice. Since the last over 10 months he has been receiving phone calls on his mobile from Delhi. They are demanding Rs 4300. Shah asked them to furnish him the statement for the use of his credit card as he had cleared all the dues before returning it to the bank. Now the frequency of the phone calls has increased and the language is crude with threats of damage to his personal assets.
These cases present the true but hard-to-believe picture of the way Indian banks, especially those in the private sector, treat their customers by using the muscle power of the so-called recovery agents or goons. Increasing consumerism has led to people getting trapped in the web of credit offered by the banks in the form of credit cards, educational loans, personal loans and other soft loans. In case of a minor default (because of hidden charges which are very high and not explained to the consumers at the time of offering) these banks use strong arm tactics to recover their dues. The physical and mental harassment forces the customer to surrender. Sometimes the harassment is so much that it can cause a heart attack or may force the customer to com
of them was shot. An ICICI bank official clarified that the so-called goons were not associated with them. In response to a query by Sahara Time a bank official pointed out that Jitendra Singh was a customer of ICICI Bank and he has more than 10 overdue EMIs on his Hyundai Santro car bearing registration no. UP-32-AV-8492. According to the bank, notices have been sent to the customer to clear the dues. The car was earlier repossessed on February 9, 2006 on default of six overdue EMI’s and subsequently released back to the customer on clearance of pending overdue installments. “This incidence has nothing to do with the recovery process of the bank. The ICICI Bank has a well laid down code of conduct for the recovery of its overdue accounts”, the bank statement said.
There are millions of consumers trapped in the credit web designed by the so-called customer-friendly banks. According to a study conducted by CCHAI, credit card holders in the country who pay the highest rates of interest in the world, have been ripped off around Rs 6,000 crore as ‘extra charges’ by banks in a span of 10 years. These banks have extracted this huge amount in the name of late fee, cash advance fee, billed finance fee, overlimit fee, cash withdrawal fee, cheque pick up fee and service taxes on all these fees.
Gidappa said, “The RBI should take action against the banks who do forceful recovery. We have received thousands of complaints of credit card holders regarding harassment by the bank officials while doing the recovery of the outstanding money. We receive around 20 telephone calls per day in Bangalore alone and it is growing by the day.”
According to S C Khanna, co-ordinator, National Consumer Helpline (NCH), people should take less credit and within their capacity to pay. “If any harassment takes place consumers can make complaints to the Ombudsman set up by the banks. If the bank does not reply within one month of lodging the complaint then they can approach the RBI.”
There is a key difference in the recovery process and rule of law in foreign countries. A recovery agent in the US or UK is less likely to use violence out of fear of the law. Here the banks have the guts to beat the law in order to lower their bad debts. In this scenario the outsourcing of loan recovery is ethically questionable.
(Some of the above mentioned cases are taken from www.core.nic.in, an online consumer redressal forum)
Things to remember:
Do not answer the questions asked by the recovery agents over the phone.
Always keep a note of the identity proof of any agent coming to your house. Try to retain his photograph if possible.
Take the help of neighbours.
Take the help of the police and lodge a complaint.
Don't make any payment to the agent. Pay directly to the bank.
Source: http://saharatime.com/NewsDetail.aspx?newsid=1556&catid=80
Unlimited credit for that car you always wanted. Personal loans for the asking. The Indian consumer has never had it so good. But this rosy picture turns gloomy in the case of even a minor default. Yogesh Tiwari delves into the menace of unlawful loan recovery...
Y Yadaiah, a 42-year-old state government employee in Hyderabad, died when he was wrongfully confined and tortured by Elite Financial Services, a recovery agent of ICICI Bank. He was picked up from a bus stop near his office on June 22 and forcibly taken to the agent’s office for recovery of a loan of Rs 15,000.
Suresh Babu, a resident of Bangalore, took a two-wheeler loan from ICICI Bank and paid all the dues. In March 2007 the bank deducted the loan amount twice through the electronic clearance system (ECS). As they deducted money twice he did not clear the dues for the month of April. Then followed a visit by two people to his residence demanding money for the months of March and April. They did not have any identification card or any letter. They started harassing him and told him to pay the outstanding amount.
Iqbal Singh took a car loan from HDFC Bank in Delhi. Somehow, he defaulted on two installments. He later informed the bank officials that he now had sufficient funds in his account and he was willing to pay the outstanding amount. The officials asked him to visit their office. When his daughter-in-law went there the bank officials confiscated the car and told her to pay the total balance loan amount plus Rs 15,000 as crane charges. The officials harassed him over the phone and used filthy language.Now, even after paying all the dues the bank has not issued the no dues certificate (NOC) to Singh. He has filed a case to get the NOC and the amount he has overpaid.
Jatin Shah, a resident of Vadodara, Gujarat, took a credit card from ABN-AMRO Bank. He returned the same as per their advice. Since the last over 10 months he has been receiving phone calls on his mobile from Delhi. They are demanding Rs 4300. Shah asked them to furnish him the statement for the use of his credit card as he had cleared all the dues before returning it to the bank. Now the frequency of the phone calls has increased and the language is crude with threats of damage to his personal assets.
These cases present the true but hard-to-believe picture of the way Indian banks, especially those in the private sector, treat their customers by using the muscle power of the so-called recovery agents or goons. Increasing consumerism has led to people getting trapped in the web of credit offered by the banks in the form of credit cards, educational loans, personal loans and other soft loans. In case of a minor default (because of hidden charges which are very high and not explained to the consumers at the time of offering) these banks use strong arm tactics to recover their dues. The physical and mental harassment forces the customer to surrender. Sometimes the harassment is so much that it can cause a heart attack or may force the customer to com
of them was shot. An ICICI bank official clarified that the so-called goons were not associated with them. In response to a query by Sahara Time a bank official pointed out that Jitendra Singh was a customer of ICICI Bank and he has more than 10 overdue EMIs on his Hyundai Santro car bearing registration no. UP-32-AV-8492. According to the bank, notices have been sent to the customer to clear the dues. The car was earlier repossessed on February 9, 2006 on default of six overdue EMI’s and subsequently released back to the customer on clearance of pending overdue installments. “This incidence has nothing to do with the recovery process of the bank. The ICICI Bank has a well laid down code of conduct for the recovery of its overdue accounts”, the bank statement said.
There are millions of consumers trapped in the credit web designed by the so-called customer-friendly banks. According to a study conducted by CCHAI, credit card holders in the country who pay the highest rates of interest in the world, have been ripped off around Rs 6,000 crore as ‘extra charges’ by banks in a span of 10 years. These banks have extracted this huge amount in the name of late fee, cash advance fee, billed finance fee, overlimit fee, cash withdrawal fee, cheque pick up fee and service taxes on all these fees.
Gidappa said, “The RBI should take action against the banks who do forceful recovery. We have received thousands of complaints of credit card holders regarding harassment by the bank officials while doing the recovery of the outstanding money. We receive around 20 telephone calls per day in Bangalore alone and it is growing by the day.”
According to S C Khanna, co-ordinator, National Consumer Helpline (NCH), people should take less credit and within their capacity to pay. “If any harassment takes place consumers can make complaints to the Ombudsman set up by the banks. If the bank does not reply within one month of lodging the complaint then they can approach the RBI.”
There is a key difference in the recovery process and rule of law in foreign countries. A recovery agent in the US or UK is less likely to use violence out of fear of the law. Here the banks have the guts to beat the law in order to lower their bad debts. In this scenario the outsourcing of loan recovery is ethically questionable.
(Some of the above mentioned cases are taken from www.core.nic.in, an online consumer redressal forum)
Things to remember:
Do not answer the questions asked by the recovery agents over the phone.
Always keep a note of the identity proof of any agent coming to your house. Try to retain his photograph if possible.
Take the help of neighbours.
Take the help of the police and lodge a complaint.
Don't make any payment to the agent. Pay directly to the bank.
Source: http://saharatime.com/NewsDetail.aspx?newsid=1556&catid=80
Spend wisely, do not borrow when it is not necessary. Just for the sake of luxuries never borrow.
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