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Tuesday, January 02, 2007

Help is at hand for harassed borrowers

Chennai: Have you been harassed by recovery agents of a financial institution for defaulting on loan repayment? Has the creditor-institution put up your mortgaged asset for sale without following the procedures or is it being auctioned off for much less than its market value?

Borrowers who despair for want of a helping hand or knowledge of procedures in such crises can now receive professional assistance. The Borrowers' Welfare Association, which was started in Bangalore as a support forum for harassed debtors, has opened an office in Chennai.

The brainchild of former banker M.M. Kini, the association has made waves in Bangalore, successfully checking unlawful means adopted by lending institutions to recover borrowers' assets.

Mr. Kini, who was here last week to open the office, however, clarifies that there is no protection for wilful defaulters. "We have no intention of interfering with the due process of revenue recovery." The aim is to level the equation between the lender and the borrower and peacefully settle banking disputes.

Among the outfit's achievements is a public interest litigation suit that led to a Karnataka High Court ruling directing the Debt Recovery Tribunal not to insist on payment of court fee when an appeal or petition is filed under Section 17 of the Securitisation Act, 2002.

The association, whose brains trust includes former bank executives and legal advisers, has come across numerous cases of borrowers, who default on repayments due to circumstances beyond their control being subjected to arm-twisting measures and of debt pressures driving individuals to suicide.


"Such instances are bound to increase everywhere as banks and financial institutions become liberal, sometimes even reckless, with their funds," said K. Shankar, director (technical) of the association. Borrowers, on their part, are too trusting of financing institutions and seldom read the fine print before signing on the dotted line.

The association plans to open more branches across Tamil Nadu shortly.

The branch office here is at 44 PV Koil Street, Mylapore, Chennai-4 (Ph: 65853448/9884833333).

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