“I’ve heard court cases about how mercilessly loans repayments were adopted up via some banks. The govt has recommended all banks, each private and non-private, that harsh steps must no longer be taken in terms of the method of mortgage repayments they usually must way the subject with humanity and sensitivity in thoughts,” she said in an intervention during the question hour in Lok Sabha.
The RBI has also taken strong exception to “harsh restoration” methods being used by recovery agents of banks and has warned of strict action.
In August last year, the central bank had also tightened guidelines to be followed by loan recovery agents acting on behalf of lenders. The guidelines bar recovery agents from engaging in public humiliation of borrowers or calling them before 8 am or after 7 pm.
There were a number of instances of “harassment” of retail borrowers and use of strong arm tactics by loan recovery agents, prompting the authorities to take strict action to prevent such a practice.
Earlier, junior FM Bhagwat Karad said, citing RBI data, that while retail loans grew at a compounded annual growth rate of 19% from March 2021 to March 2023, the non-performing assets declined from 2. 2% to 1. 5% during the same period.
“Despite an build up in coverage repo charges via 250 basispoints since May 2022, proportion of retail debtors having overlooked fee due date via 0-90 days, declined to eight% in March 2023 from 9% in June 2022. With higher retail mortgage call for and declining retail stressed out property, the full portfolio is positioned with ease,” Karad stated in a written answer in Lok Sabha.
He stated to spot and observe pressure in mortgage accounts, together with that of retail debtors, public sector Banks are taking a variety of steps together with deployment of early caution alerts and enhanced tracking of portfolios the place building up of pressure is seen.