Use of Force by Banks to Recover Loans

All of you who are criticizing banks for their stringent action towards defaulters. Can you please imagine going to a bank for breaking your fixed deposit or withdrawing from your savings account, and the banker says that we don't have money to repay you, since your money which we lent to a borrower, is not in a position to repay.

How you will feel? Rightly said by someone amongst you that bank is just an intermediary, which accepts deposits for the purpose of lending. And unless the borrower repays the loan back, how a bank is supposed to repay its depositors? Almost all the borrowers, who claim that they don't have the money to repay their loan, when someone in their family has to get married or someone falls sick, how they arrange money for those things?only because they find those things important.


And since they don't consider repaying their loans important, they are not able to arrange money for it. Are banks supposed to keep running from door to door for recovering their loans? someone suggested that there are legal courses of action available. And of course that takes time. So are you ready to get money of your matured deposit after five or ten years of its maturity, since the amount is stuck somewhere else? Its very easy to talk about system and procedure, but when we are at the receiving end, we ourselves don't remember that any such thing actually exists.

Hello friends.

Someone take the loan only if he need the money and he has not other resource to get money.

But we have to give back that money to the bank. That is the rule of this business.

And according to me the rule is rule and it is same for everyone. So, if some one can't give the money back, then bank can use the force to get the money back.

But also, sometimes there may be some valid reasons not to give money back. For example, a farmer had taken a loan and now, he is not able to pay back because of the loss.

In this case, the bank should not use the force.

But if someone wants to cheat the bank and intentionally don't want to pay back, that the bank need to use the force.

So in my point of view, if someone is not paying the loan back, then first, the bank should find out why the person is not paying back, after that it should be decided whether to use the force to get the money back or should extend the time.

Banking is also a business and no one wants to loose their money so definitely bank also never want that.Before granting loan to customer they should study its background .rather than doing it banks are advertising that they can give loans in just 5 minutes,this is where the problem starts customer feels it good and takes it without thinking how to return it.Force is not best way for recovery .They can recover it by legal ways like auction of property etc.

According to my view point bank first see the worthiness of customer whether he would able to pay the loan in future or not and bank must see his/her income criteria then the bank should provide loan to the customer so that they will not have to suffer in future and they will easily get their money back and in generally if the person is not able to pay the amount then bank would recover their amount by hook or by crook. So, bank must see the capability of a person that is he able to pay the amount of loan or not?

Hello,

Banks are acting as a trustees and not as a owner of the funds. The loans are given from the deposits made by the public in general. Moreover, in present scenario the banks are also answerable to its shareholders. The bank finance is not a charity. It is given to the needy person only after the request of a person.

However, before sanctioning the loan to any person/institute, the bank should thoroughly examine about the project and its viability. If it fails to do so, there are more chances of getting it bad. There are number of elements, which effect the recovery of the loan. If a person/institute is financially sound and yet not repaying the loan they are willful defaulters and bank should take strict actions against them. For the reasons above control, if the project fails, bank should take lenient actions and try to rehabilitate them.

Hence, only after considering the reasons for failure of loan, bank should take proper action to recover the money.

Thank you.

Yes, I agree with this statement, because if banks has a right to give loans then they have a right to recover in the best possible manner in which they can. If the person is not able to repay the loan, then he has no right to take a loan. Banks are here to lend money to help people for a particular problem, why people not understand that they are not doing a charity.

Alright every one I read the thoughts of each and every one. Now I am giving you an example which all of you should give a thought. We all are having bank accounts in a bank. Suppose one day we went to the bank for withdrawing money and the banker refuses the payment by saying that the bank have financial crisis and will pay you only if they have money that too period is uncertain. Will you just leave them? Or restructure your account? Or you will give them time to repay?

No you will demand your money instantly and not only that may be you yourself will become goon and start fighting for your money then and there. Similarly its your public which banks lends to other people and maximum people are willful defaulter. They are not repaying money because they know that banks will not be able to do anything.

So my dear friends now tell me what bank should do? They have to take strict measures because they are also answerable for teenage money of depositors. Just to cover the loss arise because of bad loans bankers are forced to give more loans. But nobody supports them in repayment. Poor banker.

The bank has no right to send goons to the customer's door. The banks take collateral which is more or less same as the amount they are lending to the customer. The collateral may be the insurance policy or deposits of the customer etc so the bank always has option to confiscate these assets and recover their money.

And if the banks fail to check their customer's credibility thoroughly at the time of sanction of loan then its the bank's fault it should not harass the customer for its own fault.

Hi Guys,

There is a proper process of selling all the loans in the market like repayment capacity and proper follow-ups etc. And if we do this and keep our focus on all the facts so different-2 kinds of forces never take place at the front side and we would never get nervous in our lives. Givers and receivers both have to perform at the same place to complete the whole process so we must do all the activities very gently.

Thanks.

According to RBI (RESERVE BANK OF INDIA) guide lines use of force to recover loan is not legal. All the banks will survive on people trust, so if the trust is ruins then how banks can do their business and that will create black mark on banks and people trust, after all banks depends on trust, Before the disbursement of loan to any person doing KYC (Know Your Customers) is mandatory by RBI.

Secondly proper verification should be there, the person who has applied for the loan, banks officials should check eligibility criteria and potential and meet the person directly for certain clarification. Banks also do need to send a intimation to the concern person before the premium.