Banks told not to harass borrowers for recovery

New Delhi, July 28 (UNI) The Reserve Bank of India has received about 700 complaints of customer harassment for loan recovery against scheduled commercial banks during the last three years, the Lok Sabha was told today.

These complaints were taken up suitably by RBI with the banks concerned for explaination and redressal, Finance Minister P Chidambaram said in a written answer.

He said as many as 22,273 complaints including those related to loan recovery have been redressed by Banking Ombudsman in 2004 and 2005.

Mr Chidambaram said the RBI had formulated guidelines, Fair Practices Code for Lenders, and communicated to banks for implementation in May 2003. The guidelines stipulate that in the matter of recovery of loans, the lenders should not resort to undue harassment like persistently bothering the borrowers at odd hours and use of muscle power for recovery of loans.

The Indian Banks Association has also formulated a "Model Code for collection of dues and repossession of security," which has been recommended to banks for adoption and implementation.

UNI YS VA SSC1351