Citizens' Issues
Bank customers tortured by recovery agents; ombudsman helps out

With instances of recovery agents harassing bank customers continuing unabated, banks need to take care in choosing and recruiting recovery agents

A recent report published by the Reserve Bank of India (RBI) on Banking Ombudsman (BO) reveals that out of 71,124 complaints it received during 2010-11, 1,722 or 2% related to direct selling and recovery agents. Some cases indicate that customers are unnecessarily victimised by the banks and had to suffer the tortures of the recovery agent, the report said. It reveals the series lapses in the KYC (Know Your Customer) procedures followed by the banks.

Take the case of Ankit (name changed). Despite having no credit cards, he was receiving frequent calls from his banks for the recovery of the dues on his card. Ankit complained to the bank. However no action was taken and calls continued at odd hours. He approached BO. During the hearing, the bank accepted the mistake saying that the defaulting credit card holder and the complainant had the same name. The BO held bank negligent in initiating the recovery measures and directed it to pay Rs5,000 to Ankit as compensation for harassment and metal anguish he had to go through.

Similarly, according to the report, another complainant Vivek (name changed) had to go through even more harrowing experience. Vivek was harassed by the abusive calls of bank’s recovery agents to pay the loan which he had never availed. He was unrelated to the bank. The ordeal was such that he fell ill and had to get operated for a heart problem. Even in the ICU, the calls continued. A complaint was lodged with the BO. At the hearing, the bank said that phone number from where Vivek was getting the calls did not belong to their recovery agents. The case was closed.

Vivek then appealed to the Appellate Authority (AA) against the bank for the trauma he had to go through and for misguiding the BO. Interestingly at the AA, the bank admitted that the calls belonged to its recovery agent. It explained that such repetitive calls were due to lack of communication and data issues with their outsourced collection agency. It was also revealed that bank did not complete the KYC formalities before sanctioning the loan and the borrower remained unknown and untraceable. The AA observed that bank sanctioned the loan without even cross checking the validity of the number and it misguided the BO. The authority awarded a compensation of Rs1 lakh to Vivek.

The apex bank had laid guidelines to be adhered by the banks’ recovery agents. However, experts point out the need for recruiting trained recovery agents. “Banks should engage trained agents to recover the money, as it is important to deal with debtors with ‘humaneness’,” GS Hegde, RBI’s principal legal adviser, was quoted saying by PTI.

So, if you get such abusive call do approach the banking ombudsman.

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COMMENTS

Sewa Singh

5 years ago

Recovery agents appointed by bank looks like gooondas as they treat with customer and their family. Bank, government, police should take strict action agaainst them.

a v moorthi besides TIHAR

5 years ago

this looks like a cooked up article. the write up should name the banks involved so that Public will know and Bank will also not use services of thugs as recovery agents. rather the concept of recovery agent itself is without merit. i also wish to make it clear that i hold no brief for defaulters. news from inside is that ICICI and followed by HDFC has the maximum default in consumer finance as they had out sourced their consumer lending to DSA whose only aim was to suggest borrowers for cosumer finance

Axis Mutual Fund launches Axis Income Fund

Axis Income Fund new fund offer closes 21st March.

Axis Mutual Fund has launched Axis Income Fund, an open-ended income scheme.

The investment objective of the scheme is to generate optimal returns in the medium term while maintaining liquidity of the portfolio by investing in debt and money market instruments.

The new issue closes on 21 March 2012. The minimum investment amount is Rs5000.

CRISIL composite bond fund index is the benchmark index. R Sivakumar and Ninad Deshpande are the fund managers.

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Axis Bank unveils ‘Mohur Silver Bars’

The Mohur silver bars carry a 99.99% purity Assay certification.

Axis Bank, India's has launched Mohur Silver Bars. According to the Bank, Mohur Silver Bars are 24 carat and are imported from PAMP (Produits Artistiques Metaux Precieux) Switzerland. The bars carry a 99.99% purity Assay certification. In order to ensure zero damages, the Bank said, these silver bars are packaged in a tamper proof cover.

In the launch phase Axis Bank will offer Mohur Silver Bars in 100gm denomination at its branches in major cities of Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad and Ahmedabad. Subsequently, other cities will also be covered.  The rectangular Silver Bars can be purchased by all Axis Bank /non-Axis Bank customers either by Cash, Credit/Debit Card or through Account debit.

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