Over 200 loan-recovery notice issued in Nagapattinam
Repay loans or be publicly humiliated. This is the message that the State Bank of India has sent to farmers here in the delta districts.
The country’s premier public sector bank has issued notices to 200 farmers warning them that their photographs would be displayed on the banners as ‘defaulters’ outside the bank.
It has also told the farmers that their photographs would be published in newspapers and the costs for the banners and newspaper advertisements would be added to the outstanding amount of the defaulters, reads the notice that also promises legal action. The State government recently announced drought relief for farmers by extending repayment deadlines for loans borrowed from cooperative societies. But farmers who have borrowed from the nationalised banks are yet to get any relief.
Farmers here have claimed that over 200 such notices have been put out to farmers in Nagapattinam and similar complaints were made from other Central districts.
“Threat of legal action is agreeable. But the prospect of being shamed and humiliated may push the farmer to suicide. This is when banks bail out corporates all the time,’ says Alexander, president, Tail End Farmers Association, Mayiladuthurai, holding a notice issued in Tamil. The notice is addressed to a farmer with an outstanding due of Rs. 39,775 for a loan taken in 2009.
“The threat of use of the borrower's photograph originally obtained for banking purpose for public humiliation is not an ethical practice,” says an official.
The borrowing clause speaks only of legal action and does not mention such practices, says Gobi Ganesan, of Farmers Association, Mayiladuthurai.
When contacted, a State Bank of India official said the letters were issued by the controller of the zonal office of Tiruchi and were well within the guidelines. According to a lead bank official, banks had received guidelines to deal with the mounting NPAs. RBI has allowed for such publication of ‘wilful defaulters’. “However, we only engage recovery agents, and have not used publication of photographs as recovery tactic.”
This comes a year after the Madras High Court flayed the recovery methods adopted by the State Bank of India while hearing a plea against forcible hypothecation of a tractor from a farmer in Erode district.
Disposing of the plea in May last, the court had maintained that recovery would have to be made as per the law and not by acts of force, coercion, or verbal abuse. Maintaining that public humiliation and force was not correct, the court had upheld the sanctity of “strict customer confidentiality” by recovery agents.