INTRODUCTION

Loan Recovery is the legal process where the lenders or creditors who have lend their money have the rights to claim back their money from the borrowers. However, when such recovery of loans turn into a nightmare to the borrowers, it becomes a harassment leading to mental traumas. Various legal authorities and the central bank such as RBI have provided the protections to the borrowers from such coercive acts and behavior of the creditors.

FORMS OF LOAN RECOVERY HARRASSMENT

The loan recovery harassment can take various forms. It can be frequent calls at multiple times in a day and at odd hours. The lenders can also indulge in defamation and humiliation in front of the family members and relatives by calling to them and enquiring about the personal details of borrowers or complaining about the irregularity that leads to invasion of privacy and dignity of borrowers.

They use abusive language to insult and threaten them about reporting to police or getting them arrest as a person so that they are instigated and compel to repay the loan as soon as possible. This harassment will cause the borrowers to get into stress and humiliation

LEGAL REMEDIES AND PROTECTIONS TO BORROWERS

RBI has introduced guidelines for the safeguarding the rights and giving protection from the creditors or lenders. There is a code of conduct for the lenders such as direct marketing agents (DMA), recovery agents and direct sales agents (DSA). The aggrieved borrower can file a police complaint under Section 506 of the Indian Penal Code (IPC) where they are liable for punishment for criminal act of intimidation. This empowers the police appropriate action against such lenders or agents.

Another remedy is to approach the court of law bringing in the injunction against the lenders. The complaint can be filed with RBI ombudsman against those banks whose lenders or the agents are indulged in such harassment. The borrowers can also approach in-house grievance redressal mechanism as per the guidelines of RBI.