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.

To recover the dues of Bank-In Govt Sponsored Scheme, the concerned Govt Dept, Who has forwarded the Loan Application to Bank should be Direct liable for Recovery And Monitoring the project and Target Should be abolished and in general Loan Schemes, security will be Mortgage And authority delivered to the Banker to sale the captioned Security in case of repayment default.

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.

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.

Of course banks should not use force to recover Bank's lent money. Bank has various other legal recourse to recover Banks fund. First Before sanction of the loan Bank should have assessed the repayment capacity of the borrower. Have done Due Diligence? Find out the reasons why the borrower is unable to pay. Whether he will be in a position to repay the loan or not. If not give the chance for settlement rather than using force for recovery of Bank Loan. People have trust in Banks and deposit their hard earned money. On the other side they take help from the Bank by getting loan for their needs. There are a very few borrowers who have capacity to pay but unwilling to pay a stringent action be initiated against them but within legal framework by not using the force.

Whenever bank provide loan to the borrower then bank get the assurance about that borrower that what the person do and what assets they have. Then a bank decide to give him a relevant money that he could return to the bank. If somehow the borrower fail to pay money then bank send there agent to know the problem. Then again the borrower will get some more time by bank to pay the money. If the same think is happening again and again then bank will take a strict action against the borrower.

I think bank should not use recovery agent, which can be avoided by carefully examine the history or the capacity of the repayment og the customer. If he seems to be unable to re pay bank should not grant any loan if granted also bank must try to recover by way of legal means and if not possible by any legal action then as a very last option he can try to recover his loan by force, but this can be avoided if bank creats a seperate cell which will examin the payment capacity of the customer before grantion the 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.

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.

I do agree that,use of force to recover loans is not desirable banking practice.The term banking means accepting deposits from public for the purpose of lending in a profitable manner.When banks asset becomes NPA banks fails to recover it by soft skill like public notices, legal notice ,it may be permitted to use trained,skilled recovery agents with the prior permission of higher banks officials . After all its public money ,bank has every right to recover its assets. But, rampet use of recovery agents should be banned,it is not desirable in any financilal system and also crital to the brand image of the Banks.Before sanctioning of any loan Banks should analyse its creditwotiness to avoid auch type of situation.