By IANS
Bangalore : ICICI Bank Ltd, the largest private sector bank in the country, has agreed to comply with a directive of the Reserve Bank of India (RBI) on engaging recovery agents, a top bank official said here Thursday.
“We will do exactly as the regulator (RBI) has suggested. We certainly will work in concert with the central bank’s policy on this,” ICICI Bank managing director and CEO K.V. Kamath told IANS here on the sidelines of a summit.
In oblique reference to frequent complaints of coercive action of his bank’s third-party agents in recovering loans from defaulting customers, Kamath said any such abuse by the recovery agents was not condoned and action was taken.
“We do not condone any action by recovery agents that is not appropriate. We are fully conscious of this. Stringent action is also initiated against the guilty when aggrieved customers lodge complaint with us,” he asserted.
Asked if the bank would have its own recovery agents hereafter as against the practice of engaging them from a third party, Kamath said as any other bank, the management would look into it and abide by the RBI circular that is due by Nov 15.
After unveiling the busy season credit policy for this fiscal in Mumbai Tuesday, RBI Governor Y.V. Reddy declared an operational circular would be issued by Nov 15 to ensure recovery agents do not resort to abusive practices for repayment of loans by defaulters.
“Banks that give loans no doubt have a right to recover them but when they use less than proper means, we become responsible for the system as a whole to ensure such abusive practices are prevented,” Reddy said.
Following the central bank’s warning, ICICI Bank has initiated measures to bring about a radical change in the approach of the recovery agents, including their mindset towards customers.
“We need to bring people, train them and (make them) internalise the culture to be positive and function within the stipulated norms,” Kamath affirmed.
Concerned over growing litigations against banks and high-handedness of recovery agents, Reddy warned the banks against allowing such practices or be barred from engaging such services.