Thursday, May 20, 2010

Bank recovery agents informing HR dept about their defaulting employees

After restriction from RBI and the court on banks regarding recovery of loan and appointment of recovery agents, recovery agents of banks and financial institutions have adopted a new method of arm-twisting credit card holders and loan defaulters into paying up their dues. They are calling up the human resources department of their companies to complain about the defaulting employees.

While giving confirmation about this measure, recovery agents said, in many cases they have found that visiting to homes and offices of the employees is not creating much pressure on people to pay up. Abdul Wahab, a recovery agent attached to a nationalized bank told, "It has worked in many cases as the employees feels the HR department will take stern action against them."

CV Gidappa, general secretary of the Credit Card Holders' Association of India, also said the banks are now approaching the HR departments to create fear among defaulters.

Gidappa said, "It is a matter of dispute between the borrower and the lender and one can't understand why banks are approaching the employer. It creates bad blood." He informed as a result in many cases the employers had promptly sacked the defaulting staff as they feared the company's image was at stake.

"We know that banks are doing this on a large scale because I have received many complaints from professionals who have been sacked in this manner of late," he said.

Gidappa told in one of the case one woman was called by her manager in the mid of the project and was asked to resin as she had defaulted on installments on a personal loan she had taken from a bank. On the other hand when employee was contacted she said, "I was not allowed to give my version. It was not a secured loan and the company had no stake in it. But since it was I who handed the resignation letter, I am not in a position to take them on legally."

Giddappa said there is increase in instances where companies have sacked employees for defaulting. One IT company had sacked eight employees in this regard.

Total income of banks rose to Rs 11,457 crore as compared to Rs 9,927 crore in 2008-09 while its operating profit increased to Rs 2,421.5 crore, up 43.71 per cent.

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