On an average, inflation has been hovering around 9.5% in the last fifteen months. The Reserve Bank of India (RBI) has hiked policy rates 10 times in this period, which hasn’t helped borrowers either.
Many borrowers saw their loan tenor increased as banks raised interest rates. Rising interest rates, coupled with high inflation, have sent the monthly budgets of many a households for a toss. If you are struggling to service your equated monthly instalments (EMIs), you could have already faced a recovery agent or may do so in the future.
The RBI has issued guidelines on training recovery agents and the methods they should adopt for collection.
“All our agents have gone through the approved and mandatory training as per the regulator’s guidelines," said Manju Bhatia, joint managing director, Vasuli.com, a recovery firm which deals with collections on secured loans. According to the Banking Codes and Standards Board of India (BCSBI), “the collection policy is built on courtesy, fair treatment and persuasion.”
But these guidelines and rules seem to have made little impact on the way recovery agents function.
“Aggressiveness of recovery agents has decreased in Mumbai, but in other cities it continues,” said VN Kulkarni, chief counsellor, Abhay Credit Counselling Centre.
Know the rules: You, as a debtor, have certain rights. Knowing those rights will help you handle a recovery agent.
Identity: You can ask the recovery agent to show his identity card issued by the bank or under the authority of the bank.
Privacy: You have a right to privacy. The recovery agent cannot discuss your debt issue with another person.
Time: The recovery agent should contact you between 7am and 7pm. However, if your working hours or work shift does not permit the same, you may be contacted beyond the above mentioned time limit.
Calls: You can choose the place and time for receiving recovery calls. You can also request them not to call you at a particular place or time.
Decency: The recovery agent has to talk to you in a decent and civilised manner. Also, the written communication sent by the bank should be easy to understand.
Investigation: If you file a complaint against a recovery agent, the bank needs to investigate the matter.
Inappropriate occasions: If there is a death in your family or any such event, you can tell the agent not to call you or make visits for a few days.
Records: Banks usually document the content of conversations between customers and agents along with the time and number of calls. Banks also need to keep all copies of communications sent to customers.
Disputes: If you face any dispute or differences regarding dues, seek assistance of the lender.
There could be various reasons for you not being able to pay instalments on time. If the reason for non-payment is not temporary, it’s best to approach credit counselling agencies and seek assistance.
Also, if you think you are harassed you should approach the bank. And if not satisfied by its response, get in touch with the banking ombudsman.