ICICI Asked To Pay Litigation Bill
The Supreme Court on Thursday came down heavily on banks for engaging musclemen for recovering loans from their customers.
While dismissing a petition of ICICI Bank, a bench comprising Justice Tarun Chatterjee and Justice Dalveer Bhandari said: ‘‘We deem it appropriate to remind the banks and other financial institutions that we live in a civilised country and are governed by the rule of law.’’
It also asked ICICI Bank to pay Rs 25,000 as costs of litigation to the respondents.
According to the court, complaints received by Reserve Bank of India (RBI) regarding violation of guidelines and use of abusive practices followed by recovery agents would be viewed seriously.
The court said that RBI had expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law.
Reserve Bank of India in a letter accompanying its April 24, 2008 ‘Guidelines on Engagement of Recovery Agents’ had stated that it might consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period.
‘‘In case of persistent breach of above guidelines, the RBI may consider extending the period of ban or the area of ban. Similar supervisory action could be attracted when the High Courts or the Supreme Court pass strictures or impose penalties against any bank or its directors/ officers/ agents with regard to policy, practice and procedure related to the recovery process,’’ the apex court stated.
The Times of India 16 May 2008 P.4 New Delhi
With thanks from The Time of India
©All rights reserved with the Bennett Coleman & Co. Ltd
For any query:- legalpoint@aol.in
The Times of India 16 May 2008 P.4 New Delhi
With thanks from The Time of India
©All rights reserved with the Bennett Coleman & Co. Ltd
For any query:- legalpoint@aol.in
1 comment:
I was doing my research on debt recovery in India and came across your post.
If this is the fate of banks, what do individual creditors do?
Is there any coverage in the law for individuals that have lent money and are trying to recover it ? Another long legal battle in a civil court?
Surprisingly, A friend of mine was approached by 2-3 debt recovery firms who are ready to recover individual debt for him at 20-30% trasaction fee. I am wondering how legal are these firms? And What is the time frame?
Also, like here in the US, is there a central body that keeps track of debts/litigations of an individual and update their credit rating to avoid debtors from borrowing from otherbanks with false documentation etc?
If you have information on this, I could refer my friend to you.
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