The Hindu Business Line : Loan recovery issue: ICICI Bank's plea dismissed

While dismissing a petition of ICICI Bank, a Bench comprising Justice, Mr Tarun Chatterjee and Justice Mr Dalveer Bhandari said: "We deem it appropriate to remind the banks and other financial institutions that we live in a civilised country and are gove rned by the rule of law."

It also asked the ICICI Bank to pay Rs 25,000 as costs of this litigation to the respondents.

According to the court, complaints received by Reserve Bank regarding violation of the above guidelines and adoption of abusive practices followed by banks recovery agents would be viewed seriously.

The court said that the RBI had expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law.

The RBI in a letter accompanying its April 24, 2008 Guidelines on Engagement of Recovery Agents had stated that it might consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limi ted period.

"In case of persistent breach of above guidelines, the Reserve Bank may consider extending the period of ban or the area of ban".

"Similar supervisory action could be attracted when the High Courts or the Supreme Court pass strictures or impose penalties against any bank or its Directors/ Officers/ agents with regard to policy, practice and procedure related to the recovery process ," it stated. - PTI

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