RBI considering ban on recovery agents by banks

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New Delhi, Mar 11 (UNI) Reserve Bank of India (RBI) is considering a temporary ban, which might mount to a permanent ban, against engaging recovery agents by those banks at the receving end of strictures by a High court or Supreme Court.

Stating this, Minister of state for Finance Pawan Kumar Bansal, in a written reply in the Rajya Sabha today, said this followed rise in the number of litigations against banks for engaging recovery agents in the recent past.

RBI has urged banks to follow prescribed specific considerations while engaging a recovery agent, he said adding that there had been persistent abusive practices on the part of the recovery agents, It was felt that adverse publicity could result in serious reputational risk for the banking sector as a whole. Complaints received regarding abusive practices followed by a bank's recovery agent would invite serious supervisory disapproval, he added.

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