Banks, Loans and Debts

Two of my friends lately attended a job interview. The job they are supposed to do – to collect outstanding loan dues from customers of major private banks and financial institutions. On hearing their interview experience, a lot of things flashed through my mind.

Employing persons to collect outstanding dues is not new news in Kerala. I think it is the same everywhere in the world. The modus operandi of collection agents is disturbing. If a customer defaults payment for a long time, the financial institution – icici bank, hdfc, citi financial among countless others – refers the responsibility of collecting outstanding dues to so called collection agencies.

The collection agencies and agents say they never use coercive techniques – only in saying. The action of collection agents gives hell of a time to debtors. I agree, they have failed to repay the loan they have taken, but now they have to pay back with more than money.

The first tactic of the agents is to frequent the debtor’s home on a regular basis. They just don’t visit the home, but also make sure everyone in the neighbourhood know their purpose of visit. The debtor will be faced with questions regarding his (her too) loan. Needless to say it is more than embarrassing for the debtor.

About persons who have taken vehicle loans – the collection agents come and pick the vehicle itself. All loan providers use this. There are several tight skinned persons who are more than happy to leave their vehicles with their financier for as much as three months.

I doubt what the loan due collection agents will do to defaulters of home loans.

To who are the banks, and loan collection agents doing this is another story about selling bank loans.