Humiliation a means for loan recovery

MANGALORE:  Aam Aadmi's reservation to shaming loan defaulters by publishing their photographs on giant hoardings in public places appears justified, as RTI revelations by the Corporation Bank showed a clear violation of RBI guidelines on fair treatment to defaulters.While most banks published advertisements, naming defaulters in the newspapers, Mangalore based Corporation Bank caused a flutter by publishing photographs of loan defaulters on a hoarding in front of its head office. The hoarding which was replaced in the second week of May, prompted RTI activist Harsha Raj Gatty to submit an application under the RTI Act seeking information on the motive behind such behaviour.The documents procured under the RTI Act, reveals that the objective was to mount tactical pressure on defaulters, who otherwise enjoyed a respectable image in the society and prompt defaulters to clear dues. The internal circular from general manager (recovery division) HMA Khan advises branches to publish photographs of defaulters outside the branch premises.According to the documents released under the RTI Act, the bank justified its decision on humiliating its defaulters by citing a judgment where Madras HC had permitted SBI to publish the defaulters' photographs. However Harsha asserts that the hoarding intrudes into the privacy of a defaulter, which is strictly prohibited by the RBI.The RBI emphasises that the bank and their agents should not resort to intimidation or harassment or public humiliation of debtors. The round the clock display of photograph of defaulters also violates the RBI's guidelines on specific calling hours of customers, Harsha points out.The Corporation Bank abruptly replaced the hoarding two weeks ago.