Suicide was not the only option for 50-year-old Kandivli resident Jateen Patel who killed himself on Tuesday, burdened by business losses and a bank loan of Rs2 crore. He could have visited a credit counselling centre that may have helped him negotiate his debt with the bank.
In Maharashtra, banks like ICICI, Bank of India and Bank of Baroda have opened such centres. Bank of India’s centre is called ‘ABHAY’, the one by ICICI is called ‘Disha Trust’, and the one by Bank of Baroda is called ‘Grameen Paramarsh Kendra’.
“At ABHAY we act as credit counsellors and try to work out solutions for people who find it difficult to repay loans. We help borrowers prepare letters requesting banks to forego the interest or a part of the principal,” said PJ Fernandes, counsellor at ABHAY.
In April 2008, the Reserve Bank of India (RBI) directed banks to set up financial literacy and credit counselling centres as a corporate social responsibility initiative. “So far, banks have reported either setting up or proposals to set up 123 credit counselling centres in the state,” said the RBI Annual Policy Statement released in April 2009.
However, such centres were set up as extensions of bank branches, engaged in promotion of bank products.
Subhrramaniam Vairavan, executive V-P of Debt Doctor, a private company offering similar services, said, “They will obviously not be comfortable letting the debt go.”
But unlike ABHAY, Debt Doctor charges a fee. “We charge 2% to 5% of the debt amount,” said Vairavan. Debt Doctor is currently located in Bangalore and 90% of its clients are salaried individuals in the age group of 20 to 40 years, he said.
