Use of Force by Banks to Recover Loans

Right now in Bangladesh there are a lot of banks and financial institution are playing in the same fields. Every banks or financial institutions has set high target in terms of disbursement or profit maximization. The high target set is the main problem from the banks or FIs side. To maintain this, the officials of the these institutions make unhealthy competition in the market. For example- "X" Bank disbursed a certain amount of loan to a particular good customer with high creditworthiness. But the "Y" bank approach to the same customer I will be you loan just double of the "X" bank and You need not to liquidate the loan of bank "X" loan.

In that case, the borrower cannot properly use the fund or somehow get the scope to divert the fund because his/her business doesn't require excess fund. In that case he/she can not maintain or repay both the bank loan installments properly because the business is not generating the expected cash flow.

So I will emphasized on the relationship banking (Customer-bank) activities besides high credit worthiness of the customer. Relationship banking can prevent default of the loan.

This a very unethical practice which is being practiced by Banks nowadays to recover the loans which they have given to less credit worthy people of the society...banks should not follow this practice as it will lead to crime and it also brings inefficiencies in our financial system...so,banks should follow fair credit practices and follow the norms and guidelines give by the Apex bank regarding in giving advances and loans.

If customer could not pay the loan and now many years passed and would like to make settlement whatever the money has as per the his capacity. Is is possible?

I agree with statement first of all bank gives the temptaion of loan to the customer, when customer trapped the loan mania, then bank send their goons to collect the rest of amount, bank sell the loan like vegetable they don't check crdit worthiness of the customer, bank should reform their policy regarding loan.

I think it is a way to recovery the loan money, but there are other way. The bank first try to motivate the person to get a best way to earn money and also if possible the bank should help the customer again but in another way. It may difficult to implement.

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.

Banks these days provide loans to its customer just without any tight information of the borrower. Thus, it creates a situation of inconvenience for them to recover it. In such situation the institute is left with with no other option other than to use some malice means. As such the money the borrower borrowed is the money of other individual in rotation basics. Therefore it has to be endowed with such power to recover it by any means.

First of all we should bifurcate the people into two. 1) will full defaulters and another genuine. Now a days willfull defaulters have turned out a lot. Hence in order to arrest the same a slight negatativity has to spread to create awareness as well to inculcate the habit of repaying the installments on time. 2) genuine - banks have do certain provisions to cut down the rate of interest or to delay the period of repaying the loan. Finally banks are for the devolopment of the country which has great impact on the economy of the country.

In My Opinion. This is a Wrong way to use Force by Bank to recover Loans.

Because There Are Different types of Peoples in India According their Profession.

Some Peoples Are Good Business Man, Some Are Employee, Some are Farmer & Other Are Poor & unemployment.

First of All. If a Person Do not Repaying their Loans Payment, a Bank Should Know About Why He/She is not Repaying their Loan Payment. If His Condition is Critically So A Bank Should Create A Settlement letter to recover their Loans. If After the Settlement Letter, Person do not repay their Bank Loan Payment. Then A Bank Should Send a NOTICE to a Person Who take the Loan as Legally.

If After that He/She is not able to Pay Their Loans Payment. Then A Bank Should Create A Legal Notice That If A Person Have Son/Daughter, if He/She is above Age Or Under Age of 18, Then He/She Would Fulfill His Father/Mother Loans Payments Time To Time. If His Son/Daughter Will Not Repay Their Payment then Company Will Take A Strict Action Against Him/Her.

& A Bank Will be Liable To Seize His/Her Whole & any type of Property Legally.

Banks does not have its own money to give loans they accept money from public as deposit and then lend that money to the borrower. And the deposit money is payable on demand of the customer. And at the sanctioning time of the loan bank should told every condition to the borrower. After the bank can be strict on the loan recovery. But physical force should not be applied to any borrower.