Opinion - Letters to the Editor   

Recovery agents

This refers to the editorial, ‘Banks and their recovery agents’ (Nov. 2). The main reason for banks deploying recovery agents is to save the long-term cost. The recovery team is on the payroll of the agents; the banks are not needed to pay the cost — P.F., gratuity, and other fringe benefits. The agents who cannot afford to pay decent salaries are forced to recruit unqualified ones leading to uncivilised collection practices. The other pitfall of the whole process is that rarely do banks verify the antecedents of the agents. In a number of cases, the agents are hand-in-glove with the recovery team and become involved in all sorts of arm-twisting tactics.

A.P. Thiruvadi,

Chennai

The financial sector in India, spearheaded by the RBI, could borrow a thing or two from the U.S. credit rating system. Now that the CIBIL (Credit Information Bureau of India Limited) is in place, lending agencies can make a better assessment of a borrower’s repayment capacity.

The advantage of such a system is that legitimate customers who pay their loans on time carry a lower risk profile and hence can enjoy easy access to loans at very low interest rates. Defaulters will be penalised by way of non-availability of loans in future or very high interest rates, but would not be threatened or disgraced.

Anand Muralidharan,

Bangalore

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