The Hindu : Andhra Pradesh News : Steps to curb ‘strong arm tactics’ by banks

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Wednesday, Jul 18, 2007
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Andhra Pradesh

Andhra Pradesh

Steps to curb ‘strong arm tactics’ by banks

Special Correspondent

Banks to be held responsible for the acts of its agents

TIRUPATI: The Chittoor district judicial authorities have initiated steps to curb the use of ‘strong arm tactics’ by the commercial banks against their borrowers and also to drive it home to them that as far as the recovery of their loans is concerned, they should adopt only the ‘legal means’ and can not employ ‘goondas’ to take possession of the properties by force.

Court’s directions

According to a note released here on Tuesday by the Third Additional District Judge-cum-Chairman of the Mandal Legal Services Committee, Tirupati, D. Tarakaram, the Supreme Court’s directions were issued while disposing of a case between the ICICI Bank’s Allahabad branch and one of its customers involving the alleged forcible possession of the customer’s vehicle by the bank’s ‘recovery agents’.

Important among the SC’s directions are that unless there was a default of three instalments, a customer can not be termed as ‘defaulter’ and the bank’s recovery agent should not seize the properties, normally vehicles, without the prior notice.

The collection agents shall not disturb privacy of customer and his family members. The bank shall be responsible for the acts of its hired agents and should be brought within the purview of the RBI. “We are governed by the rule of law and as such the recovery of loans or seizure of vehicles could be done only through legal means and not by employing goondas,” the apex court observed in the case.

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