Use of Force by Banks to Recover Loans

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.

HELLO,

Myself completely disagree with the statement. Use of force to recover loan is false statement. Because banker can apply force to main on farmers and small business owners.

1. For above category are always willing to pay the all loan amount regularly if no unforeseen things happen.

2. But for the case of big business man and millionairess never pay loans. So many examples are there.

I conclude that only bank can take documentation perfect that payout period completed then recover by law should be clear.

The role of a bank in lending is likened to that of a BRIDGE across a river; the bank takes money from the surplus unit and give to the deficit side, this role is based on trust as the fund belongs to the public. Therefore, failure on the part of a borrower to repay a loan is a breach of public trust.
It is noteworthy to mention that the release of funds to any borrower at any point in time is a privilege as there are many others who also require the same fund and as such this should not be abused by borrowers. For purposes of sustainable trust and integrity and for economic growth, banks must ensure that every fund given out as loan must be recovered, if need be, some level of force may be applied, depending on a given situation.

I accept the fact that there is some amount of fault with the bank but people ? are they very correct in what they are doing ? If you know that you will not be able to pay the amount why do you have to get the loan. In cases where something backfires unexpectedly I can understand but there are people who deliberately get loans and avoid paying them back and the bank has to take some step as money is in stake. So the fault lies with both I'll say. The bank should act responsibly while giving loans and so should citizens applying for loans.

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.

The use of force by the banks to recover debts from the defaulting debtors is nothing but collecting money through violence. And, any resort to violence is a crime prohibited by the laws of the land. Do the Banking Regulation Act and the allied legislation provide for such course of action to protect the banking industry? If not, the banks resorting to this kind of practice are certainly doing illegal acts that must not be allowed to go without impunity.

The logic behind such course of action cannot be endured even on economic grounds why the banks should move ahead recklessly with the depositor's moneys to dump them into unworthy hands? Why would they not arrange for adequate security against the loans they extend to risky ventures? They must remember that they stand in a fiduciary relationship with their depositors and thus stand as trustees of the properties of the latter. And no rational depositor expects that his or her banker applies violence to guard his or deposits.

The present picture reminds one of the facts and legends of the moneylenders who used to ravage the lives of the masses in the countryside during the earlier days although many instances are sometimes reported even these days. How one can forget in this context the unforgettable Shylock of the drama The Merchant of Venice by Shakespeare, the Great who made usury an art by resorting to cruelty. One may even be amazed at the sobriety of the kabuliwallas i.e. the Afhgan moneylenders vis-a-vis the rowdiness of the so-called 'modern' bankers.

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.

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.

Though there are many options, using force is more viable that too for cheaters who has gone abscond. Proper customer evaluation mechanism should be in use to prevent this case at the beginning stage. Risk profiles should be created and should be cautious with customers placed under high risk category. Wat if the person with high credibility becomes bankrupt? there's no other way than to own the security pledged by the defaulter. But if it's an unsecured loan which is given on the will of the manager judging the customer's credit worthiness? The only way is to recall by force but it may have negative impacts which may make the customer to take hasty decision like ending his life. So it's up to the management to make the advance after looking at various security concerns.

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.

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.