Earlier on October 30, the Reserve Bank warned the banks to ban recovery agents if they continued their abusive practices.
We have asked all the banks to check the credentials of recovery agents, fix minimum qualification for them and ensure proper training is given to them so that complaints against their recovery methods could be minimised, IBA chairman MBN Rao told PTI.
Referring to the decision of the Delhi Consumer Commission to impose a fine of Rs 55 lakh on ICICI Bank for excesses committed by its recovery agents, Rao said, we have nothing to say except that banks would have to follow the rule of the law.
He, however, said that the complaints against recovery agents were exaggerated. Terming ICICI Bank incident as an aberration, he drew a parallel with auto industry. Just as a few accidents happen when millions of cars are sold in the country, the highhandedness in recovering loans are also rare cases, he said.
The IBA chief, however, said the consumer forums and courts are always free to take action on the complaints of clients. Rao, who is also CMD of the public sector Canara Bank said most banks followed a code of conduct and duly laid out procedures when it comes to recovery.
On whether IBA was in favour of legislation on fixing liability on lenders, he said there was no need for such harsh measures and banks would take measures in this regard.
"Even if borrowers have any complaints regarding recovery agents, they could be dealt by the Banking Ombudsman as well," said the IBA chairman.
In its mid-term credit review, RBI has also expressed its concerns about highhanded approach of recovery agents of some banks to recover auto and home loans.
"After the review, IBA held a meeting earlier this month where the issue was discussed. Following which, we have decided to issue directions to all the banks," he said.
Earlier also, Rao had said that IBA was looking at a system for registration and regulation for recovery agents and could have an empanelled list of recovery agents. RBI is expected issue a circular on fixing norms for recovery of loans and agents by November 15.
Meanwhile, following wide-spread criticism of excesses committed by the ICICI Bank recovery agents, the bank has launched an advertising campaign asking borrowers to be cautious before taking a decision on loan.
