RBI asks banks to be humane with borrowers

The Reserve Bank of India has said banks should ensure that loan defaulters are not put to embarrassment while debts are recovered.

Participating in a two-day workshop on ‘Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002’ , RBI’s Principal Legal Adviser G S Hegde said the Act allowed banks to auction properties when borrowers failed to repay the loan. It helped them reduce non-Performing assets.

However banks should engage trained agents to recover the money, he said, adding it was important to deal with debtors with ‘humaneness’.