Bangalore, Oct 25 (UNI) Businessman and Rajya Sabha MP Rajeev Chandrasekhar has sought Finance Minister P Chidambaram to bring in suitable amendments to the securitization Act to prevent coercion and thuggery on part of banks to recover loans.
Referring to a recent incident of the death of a Government Servant in Andhra Pradesh following coercive methods used by the ICICI Bank to recover a loan of Rs 15,000 he said in a letter to Mr Chidambaram, released to the press here, that ''Banks and their Management should be subject to the full force and power of the Indian Criminal penal code to discourage them from'' resorting to thuggery and coercive methods of loan recovery in the future.
Recalling Mr Chidambaram's reply to a question on the issue he had raised last year in the Rajya Sabha that the issue was being addressed by RBIs regulation and guidelines and self regulation by IBA he said the role of RBI in this was inadequate.
He asked the Finance Minister what penalties the RBI had levied for this incident and in how many incidents have they penalised and/or prosecuted in the past one year.
''This whole area of banks conduct of loan recoveries is very poorly regulated or not regulated at all. It is obvious that banks such as ICICI and others are continuing to use elements that have links to criminal underground to undertake this loan collection activity'' he said adding that willingly or unwillingly these banks were funding the criminal elements in the society.
In view of the recent incident he urged the Finance Minister to review the entire issue once again and initiate changes in the law to ensure that lenders were obliged to operate under the framework of law.