RECOVERY-PROCESS BY BANKS AND NBFCS FROM LOAN-DEFAULTERS SHOULD BE MODIFIED

Bureau,Odishabarta

DELHI: Recovery process by banks and NBFCs from loan-defaulters should be modified to end with inhumanity adopted in recovery-process.

Presently private banks and Non-Banking-Financial-Companies NBFCs employ goons for loan-recovery especially on unsecured loans adopting all types of inhuman tactics which has resulted in even family-suicides apart from suicides by individual loan-takers. With sharp decline in economy, most trade and industrial activities have been worst affected starting from faulty implementation of otherwise good steps of demonetization and GST. Now with spread of Corona virus, business activities have come to a standstill. Central government and Reserve Bank of India RBI should take steps that all types of recovery-process by banks and NBFCs including court-cases and asset-seizure may be suspended till Corona-virus is controlled.

Moreover some permanent steps are necessary in regard to loan-recovery-process by banks and NBFCs. Since secured loans are given after complete satisfaction of security including properties pledged, loans may be taken as completely settled after seizure of secured assets. Presently banks and NBFCs deliberately sell pledged properties at throw-away prices with their officers getting under-table money as a share of difference of market-price and auction price, and thereafter initiating civil court cases to recover balance amount of money.

In case of unsecured loans, NBFCs adopt all types of inhuman torture including sending goons and filing criminal court-cases under section 138 of Negotiable Instrument Act in far-away cities even though their offices may also be in the city where loan is given. Rule should be to file such court cases compulsorily in the city or nearest city of the address where loan is given. Rather banks and NBFCs must not be allowed to misuse courts as recovery-agent for their loan-business by empowering them to file section 138 of Negotiable Instrument Act. It is also illogical that NBFCs are allowed to earn huge profits through high interest-rates on funds financed by public-sector banks. There should be a complete ban on banks financing NBFCs for giving loans. Instead public-sector banks may give loans directly after ascertaining security of loans. Luring people for taking loans through phone-calls should be altogether banned.

Input;Subash Agarwal