Use of Force by Banks to Recover Loans

Hi I am SHUBHAM,

Well people search such a bank that can give them loan and then leave them alone; unfortunately they are unable to find it. Using force by banks to recover loans is not a healthy deed. But people should know that banks not meant for charity rather they are a well established financial institutions and work for profit motive.

RBI has declared the use of force for loan recovery as illegal. But, RBI should make its rules of loan recovering flexible so that both the interest of the bank and its customers is judged and protected.

Checking for credit worthiness is not enough at all times. What if I earn enough now but fall into difficult financial times during the time I am paying off a loan/due? Medical bills run into lakhs, so can a loss in business or even a job cut. I am NOT talking of INTENTIONAL defaults here. What can "good credit worthy" customers do when they fall into bad times? Credit cards etc only spiral the total dues. If a cstomer cannot pay, there are late fees, finance charges, overlimit charges, service charge etc. That is not all. There is even a service charge for adding late fee to the a/c. What can a person do in such a situation? There are no facilities where a customer can request for a period of relief from paying back loans/credit dues. I have not come across a single bank in India which has such a relief period.

As a for profit organisation, banks should be responsible for the defaulted loans they issue, as an investor is responsible for a bad investment. If one purchases stock and loses money, one has no right to assault, through either legal or physical means, the institution from which they purchased the stock in order to gain financial restitution. When a loan is issued, the bank accepts a degree of risk. If their customer defaults on a loan and cannot supply the required funds, for whatever reason, the bank has accepted the risk and must therefore also accept the financial loss. The defaulter will have to suffer legal ramifications for dishonoring the arrangement (i.e. Bad credit). There is absolutely no justification for the physical or verbal harassment of a person because they are UNABLE to pay their debts.

There is a system for everything, & it should go according to that. Bank are working as a mediator to provide loan to the needy ones, that money which bank provide from their treasure is the money of their customers. Not receiving money on time would cause huge problem to the whole system, not recovering money on time ultimately affect the bank's credibility & banks have to bear the loss, which somehow does affect government's treasure.

For latest instance business tycoon Vijay Mallya has betrated banks by not returning borrowed money which is almost more than INR 10k crore, who will bear this huge lose?

So there is no doubt, bank should use force to recover loans in a defined systematic way.

I'm not agree with this. Because in that situation person need money from bank to start any business and they have the plan to get profit and return back the loan money to bank, but in bad situation they got loss in their business and not able to return back the money. So, bankers should give time to them. This is my thought. Because now a days many students doing their studies with bank loans. So please put trust on them and help everyone, then they will be truth to bankers.

Thank You.

Banks these days are selling loans like vegetables to feed the profit hungry shareholders and then using all kind of tactics like sending goons to recover the money. This is not acceptable to any society. India is a country where nearly 40% are living in extreme poverty and other 25% are just above this poverty line...They will accept any kind of loan without even considering its terms and conditions. My point is the banks must ensure the repayment capacity without exception before approving loans. This is also critical to the reputation of not just Banks but the whole financial system.

Hi frnds, I think that we can not say it wrong as before giving loans to it's customers bank goes through the process of knowing their capability to repay it. As instructions given by rbi in KYC norms. And if after that customers are not paying back it to banks the bank can go by force to recover it. Because it is the need of business. And if bank will not do it then everyone will try to absorb the loan without repaying it.

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.

Well when we all aply for a loan Bank always check Customer Credit History,so some of my friends giving suggesion for CIBIL, But banks perform their duty in a proper way.I have been worked in Bank Collection & i saw many person who takes loan just for default.i dont know what is the problem with cust, when they need Finance they walk up to bank and when bank need their return they simply SKIP. i don't know why they walk up to their RELATIVES when they require finance.why only bank. some cust says your sales executive keep on calling for taking loan so we took ,but have u ever travel in Train , Buses, there are lots of small seller they do lot of activity to convince us to purchase their product, but we only purchase if we need it ,otherwise we ignore it.

SO now the conclusion is this if banks are proiding loan to customer when they really need then what is the problem with the customer to pay back ??????

No doubt bank always help to customer in every circumstances. But customer wil be customer his mindset is to default, customer has money to pay mob bills, electric bill,school fee, vehicle fuel, then why not for BANK ?????

Hi Friends, According to me in India three types of people exist. First who are poor, 2nd who are middle class and 3rd who are rich. Loan are those people who are needy. Banker always try their force on poor and middle class people who sometimes unable to pay loan due to some strong reasons. But bankers not say anything to rich people. Bank should try to understand the problem of needy people. Instead of using force Bank try to give them some more time to pay back loan.