DON'T use musclemen for loan recovery: PC to banks

December 06, 2012 19:23

Finance Minister P Chidambaram has warned that severe action will be taken against banks if they employ musclemen or undesirable elements to recover loans.

"If there are specific instances of any bank employing musclemen or undesirable elements to recover loans, kindly bring it to my notice. The severest action will be taken," he said during the Question Hour in the Rajya Sabha.

Chidambaram said he has already told PSU bank chiefs that irrespective of non-performing assets (NPAs) going up or down, the loan recovery should be made in a respectful manner.

"We must respect the borrower; we must respect the borrower's circumstances and the recovery must be done in a respectful manner. NPAs rise or fall depending upon the economic conditions prevalent in the country. Today, the world over, all economies are challenged. The Indian economy also faces stress. It is the stress which is reflected in the rising NPAs. But when the economy does well, NPAs will come down as they did between 2004 and 2008," he said.

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