Recovery agents to face stringent police action for arm-twisting loan defaulters
Madurai police have initiated legal action against bank recovery agents for using abusive language and physical intimidation against a loan defaulter. Authorities emphasized that agents must adhere to RBI guidelines and legal procedures for debt collection.
Why it matters
This highlights the tension between financial institutions and consumer rights, reinforcing the necessity of regulatory oversight in debt recovery.
Recovery agents of a commercial banking company have been booked for assault, criminal intimidation and under the provisions of Tamil Nadu Prohibition of Harassment of Women Act by Madakulam police station.
A woman from Ponmeni has complained that the recovery agents and a few others had abused her in a filthy language and assaulted her and her relative following a quarrel over defaulting repayment of loan on September 25.
The police said that the banking agents had come at night and harassed the woman for defaulting repayment.
“Collection agents have guided principles in their jobs. They are bound to follow the RBI guidelines in the process of collecting the loan dues from the defaulters,” said Madurai City Commissioner of Police, S. Rajendiran.
The agents are expected to issue notice to the loan defaulters and wait till the notice period gets over for them to act further.
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