Govt warns banks of strong action for hiring goons for loan recovery

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New Delhi, Dec 3 (UNI) The government today warned public-sector banks of strong action if they hired muscle-men for loan recovery and asked them to adopt more ''civilised'' ways instead, as Parliament passed a crucial Bill for regulating banking payment systems.

The Bill--The Payment Settlement System Bill-2007', which seeks to regulate and supervise payment system in the country and designates the Reserve Bank of India (RBI) for that purpose, was passed by the Rajya Sabha after a short debate. The Bill has already been cleared by the Lok Sabha.

Finance Minister P Chidambaram, while replying to the debate on the Bill, said the practice of hiring goons and muscle-men was mainly resorted to by private banks and not public sector banks.

However, if any such incident took place for recovery by a public sector bank, the government would take strong action. There are more civilised ways to recover loans, he added.

''We will come down heavily on them. We do not support any bank hiring musclemen...There are more civilised ways of loan recovery.

The bank can go to court...,'' he warned.

He pointed out that many systems of payment settlements had come into practice including credit card and debit card systems and electronic money transfer. Even mobile telephonic payment was in the offing, he added.

''All these payment systems will have to be regulated. Instead of having multiplicity of payment systems, it is important to have a stand alone payment system,'' he added.

He said the RBI, which operated payment systems in four metros and some other regions, would continue to be the service provider.

Wherever the RBI has employed people, the employees would continue to be the on deputation.

UNI

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