If you took a loan from a public sector bank but are adamantly refusing to clear your dues now, you may be in for some public humiliation.
Public sector banks, which have recently seen a surge in bad loans that stop yielding interest payment or suffer repayment problems, have started
publishing photographs and other details of ‘wilful defaulters’ in newspapers.
Wilful defaulters, according to the Reserve Bank of India, are those who do not repay deliberately despite having sufficient funds and a solid net worth.
If the borrower does not comply within 15 days, banks may even publish the photographs of the guarantors, officials said.
However, the shaming campaign is the final resort of banks, when repeated reminders and persuasions to recover outstanding dues fail to yield results.
The country’s largest lender, State Bank of India, has already started publishing photographs. SBI officials could not be reached for comments, but the chief of Indian Bank confirmed his bank had started outing defaulters.
“We have been publishing photographs of wilful defaulters only and not of people who have not been able to repay due to real economic reasons arising out of the slowdown,” said TM Bhasin, chairman and managing director, Indian Bank.
RBI had also directed the Credit Information Bureau India Ltd, which studies the solvency of borrowers, to publish the list of wilful defaulters involving defaults of Rs. 25 lakh and above.
Bhasin said there have been cases where the defaulters have challenged the move on the ground that they could not repay their loans because of economic conditions and not on account of deliberate intent.
"We resort to publishing photographs and details of defaulters only when we are convinced that they are trying to avoid repayment deliberately. This is a tool for banks to recover dues. But this must be used carefully and we are doing that," said M Narendra, chairman and managing director, Indian Overseas Bank.
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