Engaging Bouncers To Recover Loans By Banks Unlawful: Govt

New Delhi: There has been a rise in instances of musclemen intimidating loan defaulters and confiscating valuables not only in cities like Bhubaneswar but elsewhere in the country.

The Centre, however, on Monday told Parliament that engaging bouncers is unlawful and against Reserve Bank of India guidelines.

Minister of State for Finance Anurag Thakur in Lok Sabha:

“No one has any power to appoint any musclemen or bouncers for recovery of loans forcefully. It is against RBI guidelines”.

*If banks are found engaging bouncers, RBI can consider banning the banks from engaging recovery agents.

What does the ‘Fair Practices Code for Lenders’ say:

“It prohibits lenders from resorting to undue harassment in recovering loans, viz. , persistently bothering borrowers at odd hours, use of muscle power for recovery of loans etc”.

But, this is not the first time, the government has made its position clear on this issue.

During the UPA regime as well, the then Finance Minister P Chidambaram had warned the banks of severe action if they recover loans with the help of bouncers.

But there has been no let-up in such incidents.