Use of Force by Banks to Recover Loans

According to my opinion, a bank should recover the loan amount early as possible. Because that is public's money. The term banking means accepting the deposits from the public for the purpose of lending them in a profitable manner. So the bank act as a mediator for the public. They should have the authority to recover or collect the loan amount. But it would not be in a forcible manner. There is no need to use the force. Because the customer or the public that he have already given their asset as collateral security. They can use these for sale. The bank should have the responsibility to check the credible worthiness of the customer or check whether the customer is able to repay or not.

Hi,

I am Akash. I think that the use of force by banks to recover loans should be according to the economical status of the victims. The use of force by banks in a developing country like India cannot be accepted because there are more than 10000 poor families living here. The government can change this by setting a limit. The families which have an annual income more than the limit should pay the loan at the right time else force can be used to recover the loan. For the poor once the loan can be taken from their income after their essential incomes. If the bank thinks this will damage their economical system, they should check the background of the family before giving loan.

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.

Acording 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 thier 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 direcrly for certain clarification. Banks also do need to send a intimation to the concern person before the premium.

Hi Friends, according to my view bank have no right to send goons to the customer's door. Bank first check the credit of the person who is coming for loan. Only on the bases of person annual income and its others property, bank should give the loan. On the same time bank should tell all its condition regarding the loan to the costumer. Before last date bank should call the costumer and recall him about his/her loan and said to him to pay loan at the time. If any one is fail than banks should first give a legal notice to the costumer after that bank should make a case against him in court. FORCE is not the solution of such these condition.

Hello friends.

I completely disagree the statement. Banks are giving loans to people after verifying the certificates related to their income, property and for what purpose they are taking the loan, if the bank was satisfied with those documents then only the bank ll give the loan. So if the person who took the loan unable to return the money to the bank, the bank had right to sell the property of the person and fill their loan money, but they are not having the right to force the person to return the loan. Force on the person to pay the loan is violation of bank rules. So use of force by bankers is wrong statement.

No I don, t think that banks should take such a cheap measure to extract their money out. Banks first of all should carefully go through the purpose for which the customer is taking loan and if feels satisfied than only loan should be granted and moreover after granting loan if bank feels that instalments are not properly or timely coming than bank should start taking actions like timely notice or reminder to the customer, timely visit at the customer, s and gradually warning him for legal action rather than directly sending the force because it ultimately affects the reputation of the bank and hence nation's.

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.

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.

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.