Banks cannot employ goondas for taking possession: SC

New Delhi, Feb 26 (UNI) Describing the recovery agents employed by the Multinational Banks (MNBs) as thugs, hooligans and gangsters, the Supreme Court today held that this country is governed by the ''rule of law'' and the banks cannot employ goondas to take possession of property or vehicles by force.

A bench comprising Justices A R Laxmanan and Altamas Kabir, while disposing of the petition of 75-year-old widow Prakash Kaur from Kanpur, described these recovery agents as modern day Shylocks who are solely concerned with their pound of flesh without caring for the hardships, humiliation and harassment faced by the people.

The apex court directed the government to appoint an special committee to suggest ways for reducing disparity in working conditions of the employees of these banks and the nationalised banks atleast upto the managerial level.

The court also suggested that instead of abolishing the agency system altogether the government should direct registration of recovery agents who can be held responsible for their illegal actions against the loanees.

The court also suggested that the government should also take immediate step to implement RBI guidlines dated November 21, 2005 which came into force with effect from November 30, 2005.

The court observed that multinational banks score over the nationalised banks as they are technicaly upgraded, efficient and their staff is also paid well and above all the 'dead wood' in the staff can be removed any time unlike the government banks, where staff do not have any accountability and fear of being removed from service and therefore their attitude towards the public is pathetic.

The court also directed the ICICI bank to waive of the entire interest amount and directed Prakash Kaur to deposit Rs 50,000 at one go as principal amount and pay the balance amount in instalments.

The ICICI bank had come in appeal against Allahabad High Court judgement directing registration of criminal cases against top officials of the bank including the Chairman-cum-Managing Director (CMD), Chief Manager and the Branch Manager of Civil Lines Allahabad Bank and the recovery agents who forcibly took away her truck in July 2006.

Ms Kaur, whose son is also a bank employee had contended that she had defaulted only in the payment of the last instalment and remaining 33 instalments were duely paid in time.

The court cited an instance where small school going child was intimidated by the recovery agents for the loan taken by his father.

UNI