DesiGuy
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VINOD Kumar was sitting in a friend's car listening to the radio one evening early last year when a stranger appeared, yanked him from the vehicle and beat him with an iron bar.
While the 21-year-old college student lay bleeding in the parking lot, the assailant sped off with the tiny silver hatchback. This was no ordinary mugging, as Mr Kumar's attacker was a goonda - a thug - working on behalf of one of India's largest banks.
Incidents like the one that left Mr Kumar with 12 stitches in his scalp and a 10-day hospital stay reflect a dark side of India's economic boom.
As consumer lending soars to record levels, India's banks face mounting criticism and government sanctions for their aggressive loan recovery tactics, which sometimes include hiring thugs.
With the economy growing at more than 8.5 per cent a year for the past four years, Indians are taking on home, car and credit card debt as never before.
Retail loans have almost tripled over the past three years, according to the Reserve Bank of India (RBI), reaching $US124 billion ($141 billion) for the fiscal year ended March 31, 2007.
The lending has helped drive a surge in consumption, but it has also created new headaches for Indian banks, which have limited experience recovering loans from defaulting borrowers.
Traditionally, most Indians have avoided debt. Even now, only 30 million credit cards have been issued nationwide, a very small number for a country with more than a billion people. As a result, banks haven't evolved standard procedures for recouping bad debts.
In another recent case, an HDFC Bank manager and two recovery agents were charged with criminal intimidation, extortion and "outraging the modesty" of a woman in Mumbai. The customer claimed to have already paid back a loan, while his wife told the police the agents had "misbehaved" with her. The case is yet to come to trial and the manager still works for the bank. HDFC declined to comment.
Ruling on Mr Kumar's case in November, the Delhi State Consumer Commission fined ICICI Bank, India's largest privately owned bank by market value, almost $US140,000 for what a judge called "the grossest kind of deficiency in service and unfair trade practice".
Bank thugs get heavy on loan payments | The Australian
While the 21-year-old college student lay bleeding in the parking lot, the assailant sped off with the tiny silver hatchback. This was no ordinary mugging, as Mr Kumar's attacker was a goonda - a thug - working on behalf of one of India's largest banks.
Incidents like the one that left Mr Kumar with 12 stitches in his scalp and a 10-day hospital stay reflect a dark side of India's economic boom.
As consumer lending soars to record levels, India's banks face mounting criticism and government sanctions for their aggressive loan recovery tactics, which sometimes include hiring thugs.
With the economy growing at more than 8.5 per cent a year for the past four years, Indians are taking on home, car and credit card debt as never before.
Retail loans have almost tripled over the past three years, according to the Reserve Bank of India (RBI), reaching $US124 billion ($141 billion) for the fiscal year ended March 31, 2007.
The lending has helped drive a surge in consumption, but it has also created new headaches for Indian banks, which have limited experience recovering loans from defaulting borrowers.
Traditionally, most Indians have avoided debt. Even now, only 30 million credit cards have been issued nationwide, a very small number for a country with more than a billion people. As a result, banks haven't evolved standard procedures for recouping bad debts.
In another recent case, an HDFC Bank manager and two recovery agents were charged with criminal intimidation, extortion and "outraging the modesty" of a woman in Mumbai. The customer claimed to have already paid back a loan, while his wife told the police the agents had "misbehaved" with her. The case is yet to come to trial and the manager still works for the bank. HDFC declined to comment.
Ruling on Mr Kumar's case in November, the Delhi State Consumer Commission fined ICICI Bank, India's largest privately owned bank by market value, almost $US140,000 for what a judge called "the grossest kind of deficiency in service and unfair trade practice".
Bank thugs get heavy on loan payments | The Australian
