Re: [adhikaar] RBI Guidelines
Happy New yearMalli karjuna rao
--- On Sun, 2/12/07, Subodh Chand <subodhchand@...> wrote:
From: Subodh Chand <subodhchand@...>
Subject: [adhikaar] RBI Guidelines
Date: Sunday, 2 December, 2007, 9:31 AM
I have joined this group a few weeks back.
I have a counter point for the RBI guidelines for the banks and the other lending agencies. While we are all applauding the directive for not using recovery agents for bad debts, (and rightly so as sometimes they are unscrupulous) , but look at it from the lender's point of view.
There are people who can afford to pay but stop paying back. Gentle persuasion does not work in that case. Anyway the person taking the loan has to be clear that he has to return the money as per the payment schedule and if there is a doubt about it they should not take the loan. Only when they understand that non payment can lead to unpleasant situation will they stop defaulting.
The present directives will have the following result:
1. Banks have to be extra careful in giving out loans, thereby depriving even the genuine honest borrowers.
2. Crooks will still take the loans and now will enjoy as the lenders have to take recourse to 'legal' methods, which can take years.
3. NPA of banks which have improved will again go back to the original state.
4. Some smart banks like ICICI have already started selling the bad debts to recovery agents, who do not fall under this directive.
So back to Square One.
Would love hear some other points on this subject.
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