Goa CM orders probe into loan recovery scam

New Delhi: Goa Chief Minister Digambar Kamat has called for a high-level meeting to discuss the menace of loan recovery agents.

This move comes after CNN-IBN reported how loan recovery agents in Goa were using strong-arm tactics in tandem with the local police to recover loans from defaulters.

The bank had ignored RBI guidelines of not sending notices or giving sufficient time to defaulters. Instead they sent hired goons who beat up people and forcibly took away car keys.

Jowett D’Souza, a resident of Colva in Goa, bought his dream car with a loan from a top bank in March 2002 and paid 26 installments of the loan on time. He missed just two installments, and paid for that.

Recovery agents, who were allegedly working for the bank, beat him up and took away his car on August 6, 2004. “They gave me two blows, they pushed me and grabbed the car keys from me," D’Souza alleges. Banks have a right to recover loans but there are strict guidelines on how to do that.

The Reserve Bank of India’s (RBI) guidelines say banks first have send notices to defaulters, then given them reasonable time to pay up and they are forbidden from using “muscle power” to recover loans.

The bank chose to do otherwise, and Jowett says he has evidence to prove it. He filed a Right to Information application and got Police Control Room file notings, which allegedly show that the bank had sent recovery agents against him.