RBI may ban recourse to recovery agents

Retail borrowers and credit card holders, who have been harassed by recovery agents sent by banks, may find some relief if the measures suggested by the Reserve Bank of India are put in place. In the mid-term annual review of the annual monetary policy released today, the RBI has come down strongly against the practice of recovery agents employed by banks. “The RBI would consider imposing a temporary ban (or even a permanent ban in case of persistent abusive practices) for engaging recovery agents on those banks where strictures have been passed or penalties have been imposed by a High Court or Supreme Court. A circular in this regard would be issued by November 15, the policy added.

'No signal to raise interest rates’

The Finance Minister, Mr P Chidambaram, has said that the Reserve Bank of India’s move to raise the requirement for banks to keep cash with the central bank was intended to mop up excess liquidity from the system. He also felt that this step cannot be construed as a signal on interest rates, implying that banks should not look at a hike in lending rates on account of the CRR hike. I hope banks will draw the correct message from the policy,” Mr Chidambaram said. He said that he expected the country’s gross domestic product (GDP) growth to be “slightly higher” than the level projected by the central bank.