Finance Minister P Chidambaram on Monday said the government would come down “very heavily” on banks hiring musclemen to recover loans.
"The Reserve Bank of India last week sent detailed instructions on recovery of loans, placing very strict restrictions on the mode of recovery — what can be done and what cannot,” he said in the Rajya Sabha during a debate on the Payment and Settlement Systems Bill 2007.
Stating that musclemen were not being hired by public-sector banks but by private banks, Chidambaram said: “I will advise strictest action to be taken against those who are indulging in this.” Loans must be recovered because nobody wants bankruptcy but this should be done through courts and Lok Adalat, he added.
There have been several cases of assault on customers by loan recovery agents.