ICICI Bank fined Rs500,000 for rough recovery methods
06 Nov 2007
He alleged the recovery agents impounded his vehicle and beat a friend''s son with iron rods, mistaking him as the defaulter.
The
Delhi Consumer Commission has ordered the bank to pay the complainant, Tapan Bose,
Rs500,000 compensation. Other
big lenders like Citibank and HDFC Bank have also dealt with consumer complaints
about the strong-arm tactics of recovery agents. The banks often dismiss the recovery
agents when confronted with such complaints. Earlier,
an ICICI Bank customer in Mumbai committed suicide after alleged harassment by
recovery agents. The bank later paid his family compensation of Rs15 lakh. Banks
suffer the highest default rates on its "small-ticket personal loans"
that are usually below Rs50,000. The rates of default on these loans are 10 per
cent, compared to 2 per cent for credit card defaulters and 1.5 per cent for car
loans. The bank is reducing its exposure in the segment--it now has around 3 million
such loans. Banks often run into trouble when recovery agents target defaulters
for these recoveries.
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