FM tells banks not to harass borrowers

New Delhi Union Finance Minister Nirmala Sitharaman on Monday said both public and private banks have been instructed that harsh steps should not be taken when it comes to the process of loan repayment and that they should handle such cases with sensitivity. Sitharaman said this while making an intervention during the Question Hour in the Lok Sabha on a question related to repayment of loans taken by small borrowers.

“I have heard complaints about how mercilessly loan repayments have been followed up by some banks. The government has instructed all banks, both public and private, that harsh steps should not be taken when it comes to the process of loan repayment and they should approach the matter with humanity and sensitivity in mind,” she said.

During Question Hour as Minister of State (MoS) for Finance Bhagwat Karad was replying to a question by a Shiv Sena member on harsh tactics undertaken by banks, while dealing with poor loan defaulters, Sitharaman intervened, saying that it is a sensitive matter, which has been brought to the notice of the government quite often. “A sensitive issue has been raised here. Such instances of banks, whether public or private, indulging in arm twisting tactics, while dealing with poor farmers, have been brought to our notice. We have often through RBI, instructed banks to deal with such people in a human manner,” she said.

There have been instances of representatives of banks even indulging in physical violence, while trying to recover loan installments.