9th October 2007.
Honorable Deputy Chief Minister R.R. Patil,
Home Department,
Mantralaya,
Mumbai, Maharashtra
Respected Sir,
We place on record our sincere thanks for taking active interest in the affairs of our association and in providing us with moral support in our endeavor.
You are aware of the recent happenings vis-à-vis the untimely death of an account holder of ICICI bank in Mumbai and another in Hyderabad due to illegal methods adopted by the bank in the matter of recovery of a small personal loan.
As an association representing such cases, we have represented hundreds of such cases with the banks, most of them of foreign origin, and sought relief for our members.
But the banks continue to use illegal methods of recovery, including threats of physical harm, telephonic harassment, abuse of the account holder in public places and general berating of the account holder in the presence of his family and friends. Banks and their recovery agents have crossed all limits of decency and often use the foulest of language in an effort to browbeat the customer into submission.
Banks are doing this essentially to subvert the normal legal process of recovery which is time consuming according to them.
These actions are despite of clear cut rules framed by IBA (Indian Banks Association) to which all these banks are signatories, RBI guidelines and Supreme Court directives. This clearly indicates that the banks are do not care about the law of the land are taking it upon themselves to subvert the proper legal process laid as per the law.
On the one hand these banks are aggressively pursuing the common man for availing of credit facilities and that too at exorbitant rates ranging between 28% to 50% per annum under the guise of unsecured loan and on the other hand are resorting to terror tactics in the matter of recovering the same loans even when the default is due to genuine reasons. The logic these banks give for such a high rate of interest is that the default rate is very high. Thus the loan taker is actually already paying for people who are defaulting. When queried about the default rate, it has been pegged at 7 to 8% of the total lending basket. By no logic can this translate to such a high rate of interest.
RBI on the other hand washes its hands over such high rates saying that as the loans are unsecured, the banks are free to charge any rate they feel like.
These banks are using dubious tactics such as
1. Not disclosing the actual annual rate of interest.
2. Not disclosing to the loan taker to the fact that in case of minimum payment on credit cards, the loan will amortize negatively. That is the outstanding amount will actually increase and not decrease if the customer chooses to pay just the minimum 5% of the outstanding amount.
3. Levying irrational late fees, over credit limit charges and applying other hidden charges without the consent of the account holder.
4. Raising interest rates without consent of the account holder and not reducing them across the board when the rates fall.
5. Holding the customer responsible even is clear cases of fraud committed by some one else while using the credit card or account or identity information of the customer.
6. Not supplying the terms and conditions of the loan offer, making it difficult for the loan taker to repay before time, levying prepayment charges on early payment.
And a host of other such methods.
Sir, you will be surprised to note that all the people in the food chain starting with the bank, it’s lawyers, the insurance company that initially insures the loan, recovery agents, tele-callers and a host of other agencies are directly being paid for by the loan taker. The bank thus does not lose money at any stage of the operation and is adequately insured against such losses at the cost of the loan taker.
In particular, we would like to bring to your notice the following four cases
1. In the case of Mr. Prakash Sarvankar, the person had availed of a small ticket loan of Rs 50,000 from ICICI Bank. Being unable to pay the installment, the banks recovery agents drove the person to suicide. The poor man has left behind a family of 3 daughters and his widow. Our association successfully negotiated with the bank for an ex-gratia payment of 10 Lacs as fixed deposit for the widow, a 25 Lac insurance payable after 20 years to the daughters and a medical cover of Rs 5 Lacs per surviving person in the family.
2. In the case of Mr. Prashant Chavan, our member from Nashik, who was being harassed for recovery of a credit card outstanding of his late father, we have raised the issue with HDFC banks nodal officer with a copy to RBI banking ombudsman asking for specific restraint on telephonic harassment to the family of the deceased.
3. In the case of Mr. Baban Yetam, an engineer working with Air India, who has fallen into serious default due to prolonged illness of his wife who is fighting a daily battle with death, the association has asked for specific restraint from the banks and their recovery agents to provide relief to the loan taker.
But sir, it is becoming increasingly difficult to address the malaise on a daily basis and thus there exists an urgent need for discussion of these burning issues with the top bosses of these banks.
Under your able guidance we seek that you intervene on our behalf and call for a meeting with the top officers of the following banks
1. ICICI Bank
2. Standard Chartered Bank
3. ABN Amro Bank
4. Citibank
5. American Express Bank
6. State Bank of India
7. Chief General Manager, Customer Care, RBI
We would like to place our complaints in front of them and seek your intervention for creating a platform for speedy resolution of grievances of our members along with issue of necessary guidelines to the banks vis-à-vis the right method to be adopted in the matter of recovery of dues.
We would also appreciate if senior officers of the Mumbai police are also present such that they too can be apprised of the ground situation.
Thanking you,
Yours truly,
For Credit Consumers Association of India,
Vijay Kamble
President
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment