RBI has advised banks to review policy, practice and procedure involved in the engagement of recovery agents by banks in India. RBI Governor says that banks have a right to recover the loan but when they use less than proper means we become responsible for system as a whole to ensure such abusive practices are prevented.
I would like to state here that there are more than fifty lacs NPA accounts in banks which are bad for recovery and which involves at least one lac crores of rupees if actual NPA is assessed without any fear of RBI or Ministry of Finance. Out of 50 lacs NPA accounts there are hardly fifty cases of misbehavior or mal-treatment or use of intimidation in the entire country including more than 65000 branches of all banks by recovery agents to recover bad money from willful defaulters of the bank.
For such microscopic number of cases (compared to total number of hardcore defaulters) of improper treatment by recovery agents, RBI thought it wise to announce ban on so-called harassment by recovery agents. As a matter of fact there was no policy as such which allowed recovery agents to apply improper procedure for recovery of loans. There may be some stray cases by some exceptionally inexperienced recovery agents. Such exceptional negligible cases of improper procedure should not be generalized.
Obviously the directive of RBI advising banks to put restraint s on recovery agents will send wrong message to willful defaulters and add fuel to fire so far as mounting figure of NPA loans in the bank is concerned as also the inherent danger to the profitability of the banks as a whole is concerned. After all it is public money and it is the duty of bankers to recover the money from defaulters. There are many hardcore willful defaulters who are neither afraid of bankers, nor courts and nor the police personnel has the courage to catch them and put under custody. Such hardcore will defaulters are mostly political workers, leaders, musclemen, local goondas, advocates, police personnel who are beyond control of even government policies, whatsoever it may be.
Recovery agents which are so much tarnished by the statement of RBI governor or media men by repeated telecasting of a few stray cases of improper use adopted for recovery of dues are not actually so. As a matter of fact due to continuous follow up by recovery agents an atmosphere was being created which forced the defaulting borrowers either to repay the bank’s dues or to face humiliation before their neighbours that the recovery agents are behind him. Such fear of social image getting adversely affected by recovery agents was slowly developing repayment culture in the minds of loan defaulters. And there was nothing wrong in it.
There are proportionately very large number of l cases of misuse of power and use of third degree treatment by police department on even alleged criminals whose crime is not proved or substantiated by reliable evidences. In almost all Thana, police officers use illegal and improper methods to build pressure on the picked up person to explore the truth behind a terror act or any other criminal act committed in the town. There are lacs of illustration when police beat brutally the alleged thieves or dacoits or even innocent gentlemen to discover the truth. This is also true that in fear of further torture even alleged criminal accepts that he committed the crime even though he did not commit any wrong act. As a matter of fact innocent and gentlemen at least have fear in their mind of police departments.
It is worthwhile to mention here that little amount of fear is necessary to keep the desired level of discipline in the society and in the country as a whole. But government always shows sympathy for those who are criminals, who are defaulters and who are law-breakers. The RBI governor did not give any message for defaulters to motivate them to repay the bank’s dues.
I am unable to understand why RBI Governor and Ministry of Finance then rebuke MD and Chairmen of the banks for increasing NPA. Why do MD’s of banks then give third grade firing to ED’s, General Managers of the banks if the percentage of Net NPA increases in any bank? Why the DGMs and AGMS of a bank use the improper methods and procedures on Branch Managers and Branch level officers if NPA figure of the branch increases.
As a matter of fact, due to such culture of inhuman treatment by higher authorities in the banks that bank officials has developed a tendency to conceal the real quantum of NPA and as a result overall picture of banking industry appears rosy to RBI and Ministry of Finance. Hard and bitter truth is that due to unhealthy policies of political leaders and undesirable and unwarranted statements by leaders sitting at the top, the culture of Non-repayment of bank’s due has developed fastly and it is almost the same in the entire country. Waiver culture introduced by Mr. V.P. Singh and perpetuated and promoted by all successive government in some way or other also added fuel to fire.
Why not government takes adequate measures to stop such nuisance of police and stop inhuman treatments given to innocent or even criminal. They should be advised to show love and affection to the person who is caught by them and police should be advised to lodge FIR and submit charge sheet in stipulated 24 hours before the first class magistrate as proved under Criminal Laws.
There are numerous cases of improper procedure adopted by Income Tax inspectors, sales tax authorities, Road Transport authorities, excise inspectors and other revenue collecting agents who create panic in the market and extort huge money as bribe to exonerate the alleged tax evaders. There are several number of cases of tortures by teachers to baby students in schools for non-compliance of school works.
Government is supposed to use similar and uniform directive for all the departments. Besides they should also define the clear cut course of action for recovery of dues from rigid and willful defaulters. If by love and affection as also by persuasion bad loan could be recovered then there would not have been such huge amount of bad assets in the banks.
Even in other departments like electricity department or telephone departments or any tax collection department where there are crores and crores of rupees lying unrecovered from even gentlemen like film stars and political leaders, not to speak of bad and willful violators of rules.
After all, what is the remedy in the hands of law enforcing agencies for those 20 percent of people who do not understand the language of civil society?
. As long as administrators and government officers and political leaders show sympathy to criminals on some plea or the other and as long as criminals are not properly punished the culture of indiscipline, culture of not abiding the rules, the practice of non-repayment of legitimate dues will grow more and bring about nothing but anarchy in the society. Already we are sufferer due to frequent and unabated terror acts because terrorists and Naxalites who are afraid of none, even police and the hardcore fighter army.
As such we have to ponder over how to discipline the society and develop a culture of payment of dues in all citizens. It is worthwhile to mention here that tax burden after all increases and comes on the shoulder of those law abiding persons who are regular in payment of all types of dues.
Danendra Jain
Main Road, Ranchi 834001
e-shares.info
31st Oct. 2007
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