A consumer commission has ordered ICICI Bank, the country’s largest private sector Bank, a whopping Rs.50 lakh for employing “goons” to recover loan.The client who defaulted on loan had approached the consumer affairs commission in Delhi complaining of use of force by the bank’s recovery agents.

The Delhi Consumer Commission also ordered the bank to pay the complainant, Tapan Bose, 500,000 rupees ($12,738.85) compensation. He alleged the recovery agents impounded his vehicle and beat a friend’s son with iron rods, mistaking him as the defaulter.

The commission has imposed punitive damages of Rs 55 lakh upon ICICI Bank. Of this amount, Rs 50 lakh is to be deposited in favour of the State Consumer Welfare Fund (for legal aid) and a compensation of Rs 5 lakh, including the margin money paid by the borrower towards the loan amount, has to be given to the complainant for the sufferings caused by the bank’s agents in a brutal and boorish manner because of which a youth was hospitalised for more than two weeks and received 17 stitches on his skull and back.
The Commission, also comprising Member Rumnita Mittal, issued notices to the Collection Manager of ICICI and the CEO of the recovery agency, seeking their explanations over blatant violation of the direction of the highest court of the nation.

The quasi-judicial ruling highlights a practice highly prevalent in India, in which recovery agents resort to thuggish behavior to get defaulting consumers to cough up money. Banks across the country hire these agents. Although there are strict guidelines from the Reserve bank regarding recovery methods, because the agencies are independent outfits and aren’t required to register with authorities.

This Judgement has came after a week,Last week RBI Governor Y V Reddy had warned banks about recovery agents using forceful means to collect dues.

While taking to task the leading bank, it vented its anger on ICICI for flouting the apex court’s direction that restrained all the financial institutions from employing musclemen to recover a loan amount or possession of a vehicle.

Loan against car is available in the form of overdraft against car. The rate of interest is lower than   personal loan because its like a secured loan.The procedures of this loan is very easy.
The overdraft amount is depend on value of your car.It can be 80% of the value of your car,But the valuation of vehicle are empanelled by Bank’s valuers.A current account with overdraft limit is created in borrower’s name for issue the overdraft amount to borrower.