The Indian Banking System

A news script from the TimesOfIndia on how a Bank in India sent the Muscle Men to recover money which resulted in a death of the loanee. Shouldn't the Government take tough actions against this bank and its' hired "recovery agents"?

Loanee dies in scuffle with bank agents
24 Jun, 2007 l 0223 hrs ISTlTIMES NEWS NETWORK

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HYDERABAD: Despite the Supreme Court ordering banks not to use strong-arm tactics to recover money from defaulters, a leading bank in the city did just that on Friday and sent its ‘recovery agents’ to a state government employee’s house to reclaim its dues. And within hours of the visit, the 42-year-old loanee breathed his last at a hospital in Ameerpet. The family alleged that he was beaten to death by the bank’s agents.

This comes barely four months after the Supreme Court pulled up commercial banks for employing ‘musclemen’ to recover loans.

On Saturday, the relatives of the victim staged a dharna with the body in front of the bank’s Begumpet branch and demanded compensation. According to family members, A Yadaiah, a resident of Kindi Basthi in Yapral and an electrician with the health department, took Rs 15,000 as personal loan from ICICI Bank a few months ago. He reportedly defaulted on his repayments, ignoring repeated reminders from the bank.

"The bank has outsourced its loan recovery jobs to Elite Financial Services based at Ameerpet," Punjagutta police inspector G Narsaiah told STOI. Yadaiah’s wife Sunanda told police that Elite’s agent Raju came to her house on Friday morning at around 9 am. By then, Yadaiah had left to his office at Koti. Raju even took a photograph of Yadaiah from Sunanda to identify him.

The apex court in its February order had said that banks had a right to recover dues, but they cannot use force. "You can’t send goondas to their (defaulters) house, there are ladies alone at home," the judge remarked, disposing of an appeal filed by ICICI Bank against an order passed by the Allahabad High Court rejecting its plea to quash the criminal cases registered by the UP government against the managing director and top officials for using criminal force against a loan defaulter.

The Supreme Court asked banks to stop the illegal practice forthwith. It asked them to deal with defaulters as per the procedure laid down in the law and the Reserve Bank of India guidelines.

But quite oblivious to this SC order, another executive reportedly went to Yadaiah’s house late in the afternoon and asked Sunanda to speak to her husband over the phone. "My husband asked me to arrange Rs 10,000 immediately to repay the loan. He told me that he was being beaten up by the recovery agents," she said. Even as Sunanda was making efforts to arrange the money, the recovery agent left the place. A little later, Sunanda got a call from a private hospital at Ameerpet stating that her husband had died due to injuries. Sunanda alleged that her husband was beaten to death by the recovery agents trying to make him cough up the loan amount. The agency, however, claimed that Yadaiah suffered convulsions and collapsed before their office.

Punjagutta inspector Narsaiah said they were waiting for the post-mortem report to ascertain the reasons behind the death of Yadaiah. Police, however, had registered a case against the agency for wrongful confinement and culpable homicide not amounting to murder based on a complaint.