Recovery agents to be on a leash

In an attempt to keep tabs of the activities of recovery agents appointed by the banks, the Maharashtra government is considering to make registration of such agencies mandatory.

We are exploring the possibility of registering recovery agencies appointed by banks with police authorities for the recovery of loans, can be made mandatory or not, said state's deputy chief minister and home minister R R Patil.

He was speaking to reporters after discussions with top police officials on the issue of coercive methods used by recovery agencies of banks to recover the loan.

Prakash Sarvankar, a resident of Andheri, a suburb of Mumbai committed a suicide after ICICI Bank's recovery agents humiliated him for recovery of loans. This created a public furor and bank had to pay Rs 15 lakh as compensation to the Sarvankar family.

The state machinery also swung into action and four recovery agents of banks were arrested. "I have asked police officials to find out if the Reserve Bank of India (RBI) guidelines on the recovery of loans, allows appointment of such agents. If it allows appointment of such agents, whether we can compel either the banks or such agencies to compulsorily register themselves," Patil said.

Replying to a question, Patil said, "We have asked for legal opinion from law ministry, on whether by applying principal of vicarious liability, senior officials of banks can be held responsible and also booked under sections like criminal intimidation, trespass, extortion, abetment to suicide etc.,"

I have ordered police machinery to act tough against those who indulge in 'goondagiri' for recovery of loans. Take action against these agencies just like we have taken against private money lenders, who harass, farmers for recovery of the loans, Patil told.