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If a rogue recovery agent visits, read him the law

Despite the hue and cry over the issue of recovery agents and the guidelines suggested by the RBI to regulate their activities, the menace fails to die down.

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Despite the hue and cry over the issue of recovery agents and the guidelines suggested by the Reserve Bank of India to regulate their activities, the menace fails to die down.

Not just in cities, but even in rural India there are cases of harassment by recovery agents leading to suicide.

So, in case someone comes in shouting at you, don’t panic. Guidelines have been issued to banks and outsourced recovery agents on what to avoid and how to behave. Here’s your guide to be treated the right way.

First of all, an agent is not supposed to visit you unless the bank has provided you sufficient notice. Such notice would include reminders via letters or phone calls. Only if these remain unanswered can the bank resort to using recovery agents.

When a bank decides to go in for a recovery agent, it has to inform the borrower of the agent’s details, such as name and telephone number. The recent guidelines issued by RBI on recovery agents state: “To ensure due notice and appropriate authorisation, banks should inform the borrower the details of recovery agency firms / companies while forwarding default cases to the recovery agency.”

If you do not get information on the recovery agent from the bank, the bank’s website is supposed to provide you with the details.

The code of bank’s commitment to customers, recently revised by the Banking Codes and Standards Board of India (BCSBI), states: “We will post details of the recovery agency firms/ companies engaged by us on our website. We will also make available on request details of the recovery agency firms/ companies at our branches.”

The 79 member banks — which includes almost all the scheduled commercial banks — and future members of BCSBI are supposed to follow this code.

If the bank changes the recovery agent mid-course, the borrower has to be kept updated, says RBI. “Where the recovery agency is changed by the bank during the recovery process, in addition to the bank notifying the borrower of the change, the new agent should carry the notice and the authorisation letter along with his identity card,” the guidelines state.

When the recovery agent visits you, he will first have to show an authority letter issued by the bank permitting him to collect dues from you. If you want, you can cross-check details with the agent’s identity card.

The recovery agent is supposed to visit only between 7 am and 7 pm. The BCSBI code also states: “You would be contacted ordinarily at the place of your choice and in the absence of any specified place, at the place of your residence and if unavailable at your residence, at the place of business/ occupation.”

This means the recovery agent is supposed to ask for a place where the borrower is comfortable meeting and only if not can he come at the residence, and if not there, then the office.

During all times or visits for dues collection, decency and decorum should be maintained, the code suggests. “Inappropriate occasions such as bereavement in the family or other calamitous occasions would be avoided for making calls/ visits to collect dues.”

Under no circumstances is the recovery agent permitted to thrash the borrower and his
furniture. If a customer tells the agent that he doesn’t want to speak to him, the recovery agent is required to oblige.

“The bank and their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the debtors’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations,” state the RBI guidelines.

To ensure that you have a proof of the agent’s behaviour, RBI has provided for documenting or recording the conversation.

“Banks should ensure that there is a tape recording of the content / text of the calls made by recovery agents to the customers, and vice-versa. Banks may take reasonable precaution such as intimating the customer that the conversation is being recorded,” the guidelines on engagement of recovery agents state.

Recovery agents are known to offer a discount in the repayment amount. Do not succumb to such offers, no matter how tempting, as the agents are not authorised to make any verbal or written promise to a customer. They are just supposed to remind borrowers about non-payment of their dues.

Even if the agent offers a receipt for taking a lesser amount, do not settle with him say bankers. If you wish to settle the dues, approach the bank directly, they say.

An SBI official told DNA Money, “The recovery agent is not allowed to compromise or manipulate with the customer in terms of money at all.”

Moreover, never hand over cash to the agent. Either give a cheque or go to the bank and deposit the money with the loan department.

For instructions, read the authorisation letter handed over to the agent. This will tell you what would be acceptable and what would not, as different banks follow different procedures.

If you have a dispute with the bank on a certain amount that you have not repaid, inform the recovery agent about it.

“Where a grievance/ complaint has been lodged, banks should not forward cases to recovery agencies till they have finally disposed of any grievance/ complaint lodged by the concerned borrower,” state the RBI guidelines.

If these norms are not followed, the RBI has the right to impose a ban on a bank from
engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period of time.

So, if you have witnessed otherwise, make the same known to the RBI or the consumer forum. The banking ombudsman too can be approached if complaints to the banks have remained unanswered.
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