No bank has power to employ bouncers to recover loans: Govt


NEW DELHI, July 1: No bank has the power to employ
bouncers for forceful recovery of loans from customers, Union
Minister of State for Finance Anurag Thakur said in the Lok
Sabha on Monday.

Singh also said there is a clear directive of the Reserve

Bank of India (RBI) to appoint recovery agents only after

proper police verification and fulfilling other relevant


“No one has any power to appoint any musclemen or

bouncers for recovery of loans forcefully,” he said during

the Question Hour.

Thakur said the RBI has issued ‘Guidelines on Fair

Practices Code for Lenders’ which are required to be adopted

by banks, duly approved by their Board.

“The said circular prohibits lenders from resorting to

undue harassment in recovering loans, viz., persistently

bothering borrowers at odd hours, use of muscle power for

recovery of loans etc,” he said.

The minister said with regard to complaints, the RBI has

informed that complaints received by it regarding violation of

the said guidelines and abusive practices followed by banks’

recovery agents are viewed seriously.

“In such cases, the RBI can consider banning the bank

concerned from engaging recovery agents in a particular area

for a specified period.

“In case of persistent breach of above guidelines, the

RBI can also consider extending the period or the area where

the bank concerned is barred from engaging recovery agents,”

he said. (PTI)