Tamil Nadu - Madurai   

Adopt a moderate approach to recover loans, banks told

Staff Reporter

MADURAI: Banks must not rush to the courts to realise the loan; instead, they should explore the possibility of settlement through mediation and conciliation, said D. Murugesan, Judge, Madras High Court.

Addressing a gathering at the customer fortnight celebrations of Canara Bank here recently, he said that finding a solution through talks would not only save substantial amount of money spent on litigation but also considerable time. He advised the banks to adopt a moderate approach rather than a harsh approach while realising loans.

"Mediation and conciliation centres are now functioning in the courts and the banks must first make an attempt to settle the dispute even before any litigation is instituted in the court... Only in the event of a failure, they should consider the litigation," he said.

He asked the banks to be more cautious and generous before invoking the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 for recovery of loans advanced for housing, small-scale industries and similar institutions.

"Invoking the SARFAESI Act could be resorted to only in the event of absolute necessity and not as a routine course. Ultimately, customers' satisfaction matters, as without a customer there cannot be any banking activity. Equally it is the corresponding obligation and responsibility of the customers to honour their commitments without driving the banks to resort to litigation," he said.

The Deputy General Manager of Canara Bank, S. V. Krishnamoorthy, said that the bank used to celebrate the customer fortnight every year to redress grievances of customers and ensure a hassle-free banking experience.

Television talk show personality S. Raja said that banks should pay more attention towards ensuring personal care to customers than mere introduction of technologically advanced equipment and services. "Technology will only widen the gap between the banker and the customer," he said.

New facility

The Reserve Bank of India would soon announce a facility for withdrawing cash from any of the Automated Teller Machines (ATMs) across the country irrespective of the bank with which a person holds an account, according to S.V. Krishnamoorthy, Deputy General Manager of Canara Bank.

Speaking at the customer fortnight celebrations here recently, he said the new facility would be implemented early next year. The maximum withdrawal limit a day would be Rs.15,000 and customers would be charged Rs.20 a transaction for withdrawing the money from ATMs owned by other banks.

He said Canara Bank had entered into an agreement with State Bank of India, which facilitates the customers of both the banks to transact in all their ATMs.

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