Mentoassociates.com – Legal Articles

The Reserve Bank of India has issued guidelines dated 24-04-08 to Commercial banks with respect to the employment of recovery agents by them for the purpose of loan recovery. These include:

a. Banks should inform the borrower the details of recovery agency while forwarding default cases to the recovery agency.

b. The agent shall carry a copy of the notice and the authorization letter from the bank along with the identity card issued to him by the bank or the agency.

c. Banks should ensure that there is a tape recording of the calls made by recovery agents to the customers, and vice-versa. Banks shall intimate the customer that the conversation is being recorded.

d. The details of the recovery agency engaged by banks may also be posted on the bank’s website.

e. Where a complaint has been lodged by a borrower, banks should not forward cases to recovery agencies till they have finally disposed of the complaint.

f. In cases where the subject matter of the borrower’s dues is pending before courts, banks should exercise utmost caution, in referring the matter to the recovery agencies.

g. Each bank should have a mechanism whereby the borrowers’ grievances with regard to the recovery process can be addressed. The details of the mechanism should also be furnished to the borrower.

h. All recovery agents shall undergo a certificate course introduced by Indian Institute of Banking and Finance (IIBF).

i. In case of complaints against the Recovery agents, the Reserve Bank may consider imposing a ban on a bank from engaging recovery agents in a particular area. Similar supervisory action could be attracted when the High Courts or the Supreme Court pass strictures or impose penalties against any bank or its agents with regard to the recovery process.
 

From the initial days of Credit Card operations in India, there have been reports of tussle between Card issuing banks and credit card holders regarding the debt repayment. The reserve Bank of India has issued several guidelines to the card issuing institutions for the reddressal of grievances of the card holders. These include:

a.A time limit of 60 days needs to be given by the bank to the customers to prefer their complaints.

b.The card issuing bank shall constitute Grievance redressal machinery within the bank and the name and contact number of the designated officer shall be mentioned on the credit card bills.

c.The grievance redressal procedure of the bank/NBFC and the time frame for responding to the complaints shall be placed on the bank’s website. There should be a system of acknowledging customer’s complaints for follow up such as complaint number /docket number even if the complaints are received on phone.

d.If the customer does not get a satisfactory response from the bank, within 30 days period, then he has the right to approach the concerned banking ombudsman to redress his grievances. The bank shall be liable to compensate the customer for the loss of his time, expenses, financial loss etc.

Apart from the above RBI guidelines the customers have the right to file criminal complaints against the banks and the recovery agents if their acts amount to criminal offenses like intimidation, abuse, use of force assault etc. Also the customer can approach the consumer courts to redress his grievance.