The Hindu Business Line : Bankers on guard

This has reference to “Catching ‘em young” (Business Line, September 17), and the bankers’ comment that “many of the young borrowers (20-25 years) disappear after taking a loan — shifting jobs and residences, and, of course, changing their mobile numbers too.”

One feels the banks must have a foolproof system in place to recover the loan amount with interest from the borrowers without too much difficulty.

It is well-known that attrition rates are very high in corporates, especially in the case of technically qualified graduates.

Thus, employers and the banks must work in tandem to avoid the problem of credit indiscipline in the latter.

The following guidelines may be given some consideration by business organisations and banks to avoid the risk of bad debts.

The signature or endorsement of the employer in case of sole proprietorship must be made mandatory in the bank application forms for getting loans.

(In case of private and public limited companies, a senior personnel officer must make the endorsement).

The employees must be made eligible for bank loans only after the confirmation of their services.

It is imperative, after confirmation, all the employees must keep the essential certificates (pertaining to educational qualifications) in the employers’ custody.

In the event of quitting, an employee must get ‘no dues’ certificate from all the relevant departments of his/her company, branch (bank), managers, etc.,

If these four tips are followed in letter and spirit, one feels, the bankers will never have ‘aspirational, unruly’ young customers.

S. Ramakrishnasayee Ranipet

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