loan recovery methods

Sometime back, i heard a certain gulf-based bank hiring thugs to ensure they get back their money from loan defaulters. Continued discussion with other people brought attention to the fact that this was normal practice among the money institutions of our country, where the rate of giving out loans far exceed the rate of recovery. But just how far can these thugs go to get the money recovered?

A recent court case, involving ‘recovery officers’ from ABN AMRO brings to light the need for controls placed on this practice. When a bank customer, even after having paid off her loans, was still harrassed and threatened, who does the onus falls to safegaurd her rights?

Atleast this is one area where the courts appeared to have come to the rescue. But given the lenght of legal battles in Pakistan, would justice be served within our lifetimes?

The court has directed State Bank of Pakistan to provide the details of code of conduct and legal status of recovery inspector as to whether he can carry arms and act like police during the process of recovering money.

10 Comments so far

  1. d0ct0r (unregistered) on March 5th, 2007 @ 11:09 pm

    yea i have heard that too,they use that tactic to recover leased cars from defaulted clients too..

    infact in india there are thugs running small scale bank.. giving loans to poor and then using threats and other tactics to recover loan from stuborn clients… they’re very successful and have very low bad debt ratio…


  2. Kashif-x (unregistered) on March 5th, 2007 @ 11:29 pm

    Around a month ago i recvd an advert enclosed in the newspaper from Consumer Protection Society , requesting all self respecting citizens to safeguard your dignity and not to avail any loan facilty from UBL, because they were sending around thugs and bhais to recover the dues at the doorstep of anyone who might be going thru a bad patch or not be able to pay up immediately.


  3. I A Khan (unregistered) on March 6th, 2007 @ 7:48 am

    One thing I’ve failed to understand is that we’ve always managed to pick the ‘wrong’ things from other societies instead of the ‘right’ ones.


  4. Rajesh (unregistered) on March 6th, 2007 @ 9:51 am

    The supreme court on India also have bashed the Indian banks for using these meathods and making it illegal to use such measures.


  5. Rajesh (unregistered) on March 6th, 2007 @ 9:52 am

    The supreme court of India, recently bashed top most private bank here for using such measures.


  6. Bad credit loans (unregistered) on March 6th, 2007 @ 6:21 pm

    Well, creditors/lenders give out loans and they want their money. They will do whatever they have to do in order to get the loan amount that they offered to the person who acquired a loan. It’s easy for us to get home mortgage loans, personal loans or even loans for cosmetic surgery. But a lot of people tend to ignore the repayment schedule and become defaulters. Mostly, banks do not do this. They do not harass a person who has shared a good credit history with their creditor. Sadly, the event highlighted in this post does happen ever now and then and the client has 100% right to take him to the court.

    The debate of the length of cases pending in courts of Pakistan is totally different but if our juditionary was not as lazy as they are, the person who is being harassed can easily win such cases and become a millionaire within a few months! :D


  7. Bad credit loans (unregistered) on March 6th, 2007 @ 6:22 pm

    Well, creditors/lenders give out loans and they want their money. They will do whatever they have to do in order to get the loan amount that they offered to the person who acquired a loan. It’s easy for us to get home mortgage loans, personal loans or even loans for cosmetic surgery. But a lot of people tend to ignore the repayment schedule and become defaulters. Mostly, banks do not do this. They do not harass a person who has shared a good credit history with their creditor. Sadly, the event highlighted in this post does happen ever now and then and the client has 100% right to take him to the court.

    The debate of the length of cases pending in courts of Pakistan is totally different but if our juditionary was not as lazy as they are, the person who is being harassed can easily win such cases and become a millionaire within a few months! :D


  8. mansoor (unregistered) on March 6th, 2007 @ 6:28 pm

    bad credit loans: lol @ millionaire in a few months :p THAT i’d like to see here

    maybe then all those LLB’s might actually do something for a change :p


  9. Tariq (unregistered) on March 7th, 2007 @ 11:59 am

    I had heard about UBL and SCB, but just came to know about ABN-AMRO as well. It’s surprising that all these foreign-owned banks are using these methods, while the local banks are not (or may be not exposed yet). Bravo to the lady who took these thugs (i.e. the thugs + the employing bank) to court and got their behinds kicked.


  10. Ramla A. (unregistered) on March 7th, 2007 @ 3:24 pm

    What else would one expect?

    Western-inspired, unoriginal lending policies – imagining that India/ Pak economies and people do or SHOULD behave like they do in the USA. We are SAVERS, not SPENDERS… and our entire economic psyche is different. These banks are peddling products which haven’t grown organically from our societies.

    People don’t have the requisite economic behavior. Banks oversold consumer products in a society totally un-fitting for this economic models. Loans were made out to people with new money, and crazy spending behavior was encouraged by these very banks.

    I’ve heard of people defaulting by the thousands on car loans, house loans, and even phone bills. What were they thinking?

    Darlings, darlings… this is a MICRO-CREDIT economy, not a spend-more-than-your-dad-earns-& finance-it-with-cell-snatching economy as it’s turning out to be.

    NEXT big criminals: telecom companies. I’ve protested about Ufone free SIM giveaways as patently irresponsible. But who cares.



Terms of use | Privacy Policy | Content: Creative Commons | Site and Design © 2009 | Metroblogging ® and Metblogs ® are registered trademarks of Bode Media, Inc.