Use of Force by Banks to Recover Loans

Financing is dharma of Banks. All banks, generally, do carry out proper pre-sanction appraisal in all cases. In retail loans, I admit that existing income level is assessed on the basis of income tax returns. But in case of business finance, banks depend on management's worth, expertise, market reports, future business projections etc.

All these parameters are properly appraised before according sanction to a proposal. Risk is assessed and accordingly pricing and litigants are proposed. Accounts go bad many a times. This is business. Banks give sufficient time, restructures too for assisting the borrowers. The problem of NPA, has become uncontrollable.

Stricter rules and regulations are the need of the day. Recovery atmosphere is polluted many times by the political interference. The recovery responsibility of Government sponsored schematic finances should be of government authorities.

It is not correct to say that simple and honest persons are troubled by banks, especially, nationalized banks. Subsidies should be linked with timely repayments. Banks, the spinal chord of the economy, of the country should enjoy autonomy in true sense.

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.

Banks who will be using forcible method to recover a loan might create a very bad impression over other people who observes the whole scenario while some random guys are trying to recover debts forcefully. P=People who could be a prospect client in future of the same bank may change their mind watching and hearing about such demeaning act.

We all know that Generosity and Hospitality is making an entrance in the banks over the years and image rebuilding is kept on a priority. Hiring local mob and granting them to authority to use force will only result in atrocity. Banks should rather check the costumers credibility of repaying loan and take collateral to bear the losses if in case the costumer fails to pay it back.

Hello friends,

In my point of view, Banks cannot recover the loans by force. Its because Bank does have many conditions and practices. They also simply cannot sale any property if the recovery is not made. By applying those conditions and practices bank can recover the loans by giving demand notices to the borrower.

What ever the loan is Bank's definitely take security, They do have the right to sell the mortgaged, hypothecated and pledged securities under the SARFAESI Act 2002. Of course if they do not have any security then it's completely on the bank to bear the monies if the borrower becomes Bankrupt.

Hello friends.

According to my point of view bank has the right to take their money back. Just think that if you give money someone for some period and when the time goes you also want your money back so why not bank ? bank also has some rules and regulation they have to work according to their rules so yes bank can force to recover their loan.

Can one tell me when a loan is given in good faith without documentation & payment done by cheque how make that person to sign the documents and what is to be mentioned in it.

This is true that bank should verify all data before giving loan, and bank actually does it. But there are many people who provides wrong information and after giving loan, they not even think about to repay the loan. For these kinds of people, bank should surely take strict action.

But many of people who all are not in condition to repay the loan, as they are in crisis, not having money. So according to my view, before taking strict actions, bank should find out what is the reason behind not repaying the loan. Bank has power to take money back and has responsibility to provide loan to others also.

Bravo guys!

Why should someone opt for what he knows he has no capacity to do? monies kept in banks belong to other institutions and people. If for some reason Mr. A who needs financial help asked a bank to so do and the bank granted his request, has the bank done something out of the way? Don't forget that banks do assess their individual customers and the collateral they provided by the banks credit department. It is important to note that banks do not immediately seize a defaulting customer's property without thorough follow ups and warning.

Bravo guys!

Why should someone opt for what he knows he has no capacity to do? monies kept in banks belong to other institutions and people. If for some reason Mr. A who needs financial help asked a bank to so do and the bank granted his request, has the bank done something out of the way? Don't forget that banks do assess their individual customers and the collateral they provided by the banks credit department. It is important to note that banks do not immediately seize a defaulting customer's property without thorough follow ups and warning.

The bank has no right to send goons to the customer's door. The banks take collateral which is more and 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.