BUSINESS
RBI has warned ICICI Bank of stern action in case incidents of coercive methods by recovery agents of the bank recur, the Rajya Sabha was informed on Tuesday.
NEW DELHI: The Reserve Bank has warned ICICI Bank of stern action in case incidents of coercive methods by recovery agents of the bank recur, the Rajya Sabha was informed on Tuesday.
"The bank was advised by the Reserve Bank in October, 2007 that if such incidents recur in future, RBI would be constrained to take stern action," Minister of state for Finance P K Bansal told the House in a written reply.
Earlier, in view of the alleged harassment of customers by ICICI Bank's recovery agents and the judgement of the Supreme Court, the bank was advised by RBI in August to investigate and take action against the recovery agents involved.
The bank was also advised to look into the system of appointing and reviewing performance of recovery agents and undertake comprehensive review of customer complaints at the highest levels.
Bansal said the apex bank has reported that the customer who had availed the car loan from ICICI Bank filed a case under Section 308 (attempt to commit culpable homicide) of the Indian Penal Code with the IP Estate Police Station in New Delhi, under which three executives of the possession agency were arrested but were later released on bail.
On November 2, Delhi State Consumer Commission has imposed "punitive damages" of Rs 50 lakh on ICICI Bank for alleged use of force and coercive methods by some recovery agents of the bank to take possession of the vehicle finance by the bank, Bansal said.
The Commission also ordered the bank to pay a compensation of Rs 5 lakh to the complainant.
To another question, Bansal said the government has not received any proposal from the Reserve Bank to bring Lender Liability Bill to fix lending terms and conditions for cracking down on unfair recovery means adopted by some private banks in the country.
The guidelines issued by RBI clearly stipulate that the banks would be responsible for all acts of omission and commission of their agents, Finance Minister P Chidambaram said in the house in reply to another question.
RBI reserves the right to impose penalty on a bank for violation of guidelines under the provision of Banking Regulation Act, 1949.
RBI takes up the complaints with the concerned banks and cautions them to ensure that such incidents do not recur in future, the Finance Minister said.
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