For the past few days, newspapers in Mumbai have been reporting about how loan recovery agents from various banks and loan agencies, have been beaten up by the public when they went to recover dues.
Apparently these agents have been harassing the public so much that one person even committed sucide as he was unable to repay his loans.
In fact, even the government is putting pressure on Banks and Financial institutions over the methods followed by them in recovering loans.
Quite ironic, that the lender is being held for asking the borrower to return his money.
Don't get me wrong, I am against these recovery agents terrorising, threatening and using force against a borrower, but then one shouldn't be borrowing if one can't re pay.
But on the other side of the coin, you see this ocean of banks falling over each other to give you a loan, and offering gifts if you take a loan. Many do get tempted.
The banks are doing their advertising pretty well.
For example, in the newspaper, you'll have a financial advisior writing a guest coloumn about the traps to look out for while taking loans, and also, why one should only take loans in dire circumstances and not to fulfil a whim or fancy.
Just next to this guest coloumn will be a colourful advert, announcing that anyone and everyone can get a loan at low interest rates, even if their monthly income is low.
Now its obvious that anyone would look at the advert with greater interest than reading the 5 para long financial advisor's coloumn.
Plus, no one reads the fine print on the loan forms while signing them.
Bottom line is with this issue out in the open in such a huge way now,
1) people are becoming aware of the methods adopted by banks to recover loans
2) banks are being brought to book for the methods used by them to recover loans
3) the government is being forced to take some action to prevent these incidents from repeating.
This hopefully will bring about better legislation in the loan industry and people will be more cautious before taking these easy loans.
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