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'Pvt, foreign banks make greater use of loan recovery agents'

Press Trust of India  |  New Delhi 

Between July and November this year, the ombudsman received 101 complaints against private sector (72) and foreign banks (29) for use of direct selling or recovery agents, Minister of State for Finance said during Question Hour.

He said 48 complaints of similar nature were received by the ombudsman against nationalised banks (21), and its associate banks (27).

Of the total 149 complaints, received during the five- month period, 116 had been disposed of, he said without elaborating.

In 2010-11, 928 complaints were received against private sector banks, 658 against foreign banks, 52 against and its associate banks and 58 against nationalised banks, he said.

However, next year there was a sharp decline in the number of complaints after the Reserve issued guidelines asking banks to avoid adoption of uncivilised, unlawful and questionable behaviour of recovery agents during the process of loan recovery.

In 2011-12, 87 complaints were received against and its associate banks, 54 against nationalised banks, 223 against private sector banks and 83 against foreign banks, he said.

The RBI guidelines, issued on July 1, 2011, are applicable to all scheduled commercial banks, regional rural banks and even primary cooperative banks, Meena said.

"Banks are, therefore, required to rely on legal remedies available under the relevant statutes while enforcing security interests without intervention of the Courts of law," he said.

First Published: Fri, December 14 2012. 13:55 IST