Use of Force by Banks to Recover Loans

Right now in Bangladesh there are a lot of banks and financial institution are playing in the same fields. Every banks or financial institutions has set high target in terms of disbursement or profit maximization. The high target set is the main problem from the banks or FIs side. To maintain this, the officials of the these institutions make unhealthy competition in the market. For example- "X" Bank disbursed a certain amount of loan to a particular good customer with high creditworthiness. But the "Y" bank approach to the same customer I will be you loan just double of the "X" bank and You need not to liquidate the loan of bank "X" loan.

In that case, the borrower cannot properly use the fund or somehow get the scope to divert the fund because his/her business doesn't require excess fund. In that case he/she can not maintain or repay both the bank loan installments properly because the business is not generating the expected cash flow.

So I will emphasized on the relationship banking (Customer-bank) activities besides high credit worthiness of the customer. Relationship banking can prevent default of the loan.

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.

In My Opinion. This is a Wrong way to use Force by Bank to recover Loans.

Because There Are Different types of Peoples in India According their Profession.

Some Peoples Are Good Business Man, Some Are Employee, Some are Farmer & Other Are Poor & unemployment.

First of All. If a Person Do not Repaying their Loans Payment, a Bank Should Know About Why He/She is not Repaying their Loan Payment. If His Condition is Critically So A Bank Should Create A Settlement letter to recover their Loans. If After the Settlement Letter, Person do not repay their Bank Loan Payment. Then A Bank Should Send a NOTICE to a Person Who take the Loan as Legally.

If After that He/She is not able to Pay Their Loans Payment. Then A Bank Should Create A Legal Notice That If A Person Have Son/Daughter, if He/She is above Age Or Under Age of 18, Then He/She Would Fulfill His Father/Mother Loans Payments Time To Time. If His Son/Daughter Will Not Repay Their Payment then Company Will Take A Strict Action Against Him/Her.

& A Bank Will be Liable To Seize His/Her Whole & any type of Property Legally.

Banks should not use force to recover the loans. Govt of India and rbi both trying hard for financial inclusion in rural India. In this scenario, if coercive repayment methods are applied people not only will stay away from organised banking sector but they will fall prey of money lenders. But then also there are big corporate giants and individuals who default willfully. And banks have no strict method to mitigate this pain. In that case name and shame is a good try but many a time such as Vijay Malaya case. He is not afraid of shame Moreover, he blatantly lives his life in a far away country and banks are tied hand. Most of the times big defaulters go unchecked and small borrowers bear the brunt of the banks. So in a sensitive country like India banks in tandem with govt should identify the defaulters judiciously and make no wrong decision to punish helpless poor borrowers. Using force is not the end of the solution but checking on accounts keep vigilant of the repayment capacities and taking care of routine follow ups is the best way to avoid defaults in future.

Hello guys.

Banks are the mediator between the people who are depositing money in order to gain interest and the people who take loans from the bank. If the banks loose their methods of recovering money from the debtors, then the whole process will be destructed as they will be causing high losses to themselves as well as the government.

The people who are taking a loan from the bank their's financial conditions should be first checked. We are living in a such a country where everyone is not eligible to take loans. So if banks are somewhere lagging in the process of confirming their threshold financial status for providing loan then banks should not have the right to use forces on them. But if required steps are taken then they should go with the legal process to recover the loan from the debtors.

One another thing that I would also like to add that banks should also work on the loopholes that they have in the process of recovering loan where rich and strong people like Vijay Mallya get benefitted and common people get unaware of that.

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.

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.

I am not agree with that banks are offering loan like selling vegetables, because every banker has responsible to describe their bank status to their superiors. In which, they have maintain some amount of scale to providing loans to their customers. In this case not every customers are eligible to obtain the loan as per terms and conditions and their repaying capacity. It is very important to maintain their financial scale status.

The bank are very clean to offer the loan to the selective customers due to the below poverty line customers. They only offer loans based on their repaying range. They can study their customers well with their documents but document should be check well and problems are started from here only if it is clean documents the cheaters can control we can also legally use force to control the cheaters documents and their source for paying back to the bank.

Banks do go through a proper assessment of the borrower for his capacity to repay the loan on time. The conduct of the repayment history is very easy as long as the repayment is on time; In case of a sudden change the first thing would be to asses the reason; That is distinction should be made between a wilful & a genuine default.

The officials are competent enough to analyse any situation. Any decision for recovery of loan should be programmed accordingly and the BANKS should feel obliged to help the genuine defaulters by providing maximum sustained support to the needs in keeping with the gravity of the situation.

The intention of the borrower can should be scanned extensively and the genuine defaulters do need full support of the BANK to help them come out of the crisis in the best possible manner. It would be seen as a great service to the fellow country men.

As I see everyone perspective towards the whether, harsh steps should be taken by bank to recover loans or not but for me the bank should definitely use the power to recover loans. And I am totally agree with my friend who gives a good example of vijay mallya who ran out of country after taking such a huge loan and I am like to ask those who was against this step of bank is it possible if bank just kept silent and wait for the person to return their loans. As India is democratic country each and everyone get a right to take the loan but with that they also signed a bond of returning it and that time is given according to the loan taken by that person. If the person failed in his duties he is surely treated as a criminal because its govt money, people's money, taxes given by the normal people this is that money and if bank use force to recover loans than it is not wrong.