CIBIL: Strong arm agency
Why recovery agents are here to stay
RBI guidelines are good, but agents are only practical solution: Banks
Sayli Udas
Mumbai, July 5: ‘‘We will abide by the Reserve Bank of India’s (RBI) fair-trade practice code, but we will not do away with any of our recovery agents.’’
—Neil Chatterjee, Head, Corporate Communications of Standard Chartered Bank.
Despite the RBI’s intentions of cracking down on credit-card operations (see box), banks in Mumbai have admitted that recovery agents have become a part of their debt-recovery system and it would be difficult to eliminate them entirely.
‘‘The intimidation and harassment is exaggerated by defaulters,’’ said Chatterjee, adding that banks do monitor the method of recovery to ensure it happens in a ‘civil’ manner.
‘‘Do we have any other means of recovery?’’ he asked.
‘‘The judicial process in our country is very slow and we are in a business where we need to have a practical approach to recovering debts.’’
Most banks would agree. Only a small percentage of customers default on payments and have to deal with recovery agents, they say.
And agents, they add, only come into the picture after repeated attempts by bank executives have failed.
‘‘The procedure starts when an executive makes a telephone call and informs a defaulter about his dues. Then, we send a few letters and statements,’’ said Rohan Jogi (name changed), spokesperson for a leading Indian private bank. ‘‘It’s only when there’s no response that agents are intimated.’’
While, on record, banks refuse to admit that they’re aware that many recovery agents cross the line, off the record, spokespersons say using abusive language or threatening customers is the only option at times.
‘‘A white-collared guy cannot recover dues,’’ said Jogi. ‘‘You do need a stern voice and a tough-looking guy to get out money.’’
ICICI Bank claims to go through a thorough verification procedure before appointing its agents.
‘‘Any complaints coming to us are immediately investigated and action is taken,’’ said a spokesperson.
Citibank also claimed to have an internal policy on collections and guidelines for their agents, detailing how and when customers should be spoken to.
But despite redressal systems like 24-hour helplines and e-mail facilities, the bank claims that they have to involve a third party to bring defaulting customers back on track.
The solution, say industry experts, could be CIBIL or Credit Information Bureau (India) Limited.
An RBI and government effort to create a comprehensive database on the ‘creditworthiness’ of customers, CIBIL is expected to help banks share data on their credit-card users.
Formed in 2000, CIBIL has started collating data, but it will take at least another year for all the information to be in place.
Until then, recovery agents are here to stay.
New guidelines
* No physical or verbal intimidation or harassment of credit-card users
* Any act intended to publicly humiliate or intrude privacy banned
* Bank responsible for all acts of omission or commission by agents
* Penalty on unsolicited cards issued without consent
* Banks to maintain ‘Do Not Call Registry’
sayliudas@expressindia.com
posted by Superfly at 2:11 PM
3 Comments:
So what if the judicial process in this country is slow? This is the same judicial process that all the citizens have to use for solving their grievances. What makes these financial institutions special that they want "justice" to be done as early as possible? That is no reason to take law in their hands. By that logic we citizens should start settling our disputes by hiring thugs, because the judicial system is "slow".
By letting these private institutions take law in their hands, our government is merely saying that we citizens are secnd class citizens who have to use the "regular" judicial system, while private companies can take their own "fast-track" redressal mechanisms.
HDFC Harrassing old parents for nothing
Dear Mr Ray,
I seek some advice from you.
I was an urfortunate holder of a HDFC Credit card from late 2004 to early 2006.
It was supposed to be a lifetime free silver credit card.
The card had a meager credit limit of Rs 12000.00 and I had hardly ever used it.
Only twice I had used it for as small amounts as Rs 3000 and Rs 3560 only and each time I paid back within 2-3 days time not even waiting for the due date to come.
In fact I had a Citibank Credit card with a much higher credit limit and better facilities do I used to use that one more. You can check my repayment record with Citibank if you want. Satisfied by my clean repayment record they kept increasing my card’s credit limit and facilities every year.
TO the best of my knowledge I had no outstanding amount on the HDFC card and in spite of informing the bank again and again never ever received a single statement from them.
On one fine day, in early 2006 I called up HDFC Bank Credit Card Division Customer Care and informed them that I was going to destroy the card so that they can block the account. They said I don’t have any outstanding but as a fore-closure free I need to pay one hundred something rupees which would be coming in the next statement and I can pay it then. I again told them that I never received any statement from them. But they said this time onwards I would definitely get them.
Days, weeks, months have passed after I have broken the card into 4 pieces and dropped the pieces in the trash can of one of the HDFC ATM’s. Then suddenly I get a call from a person called Rajesh from HDFC Bank’s recovery section. It was about a year after I had destroyed the card. Rajesh said I had about 20,000.00 Rupees outstanding on my card and needed to pay immediately. I was stunned and I said there must have been some mistake on their part. But he kept insisting. He even threatened to drag me to the cops and the court. I felt nervous because I can’t deny that the card belonged to me because I had signed on the application form while applying for the card. Besides, I didn’t have any paper, statement, letter indicating that I’m being wrongly charged. I continued to argue with him but ultimately had to give in. He said if I pay him Rs 5000 –something on that day itself in cash, he would get me the letter of settlement within a day. I unwillingly agreed, in fear of unnecessary trouble and embarrassment.
I asked him to come to my office (TCS, Whiltefield) in Bangalore. He came with another guy from the collection agency, took the money, gave me a receipt and said he would be sending the settlement letter to me on the very next day. Ever since I had been waiting for that letter and it never came. I only have a copy of the receipt for that amount but it does in no way prove that the account had been settled. I tried calling him several times at the number he had called me from but it turned out to be an office board number so I could never talk to him.
For almost 10 months I did neither hear nor receive anything from the bank.
Now, on an official assignment I have come to Japan and I have to stay here for a couple of years if not more. Suddenly my father calls me and tells me that a certain Arjun from HDFC bank is calling and threatening them repeatedly saying ‘Your son owes us Rs 24000. Either ask him to pay or we’ll drag you to the court’. I asked my father to give them my Japan contact number and email id but they said thay didn’t want to make international calls and kept harassing my helpless old parents. At last, I told my father to tell them about Rajesh and the letter of settlement that never came to me. Now they are saying unless I present some kind of settlement letter to them, they will send goons to our place and issue a legal notice etc etc.
My agreement with my firm doesn’t allow me to go to India before I have completed at least 18 months here. I am feeling so helpless out here.
What to do? How to prove I am innocent?
Is there anyone who can help me out? Can my parents sue the bank for harassment? Is it possible to do so without having all necessary papers? I don’t have any papers with me except for that last receipt, partly because of my foolishness but mainly because of the bank’s unwillingness to send statements.
Is there any way this can be handled?
Awaiting your mail/reply.
Devalin Sarkar
Tokyo, Japan.
Phone : +81 90 35474346
Email : devalin.sarkar(AT)tcs.com
Hi,
Many of these Credit Organizations do have issues by not providing bills on time. CHarging unnecessary bills to customers. Charging fees like Late Fees etc. This practice should also be reported. Otherwise its quite one sided and this is wrong
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