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ICICI under fire on misconduct of recovery agents

Sep 27, 2007 10:42 PM IST India India

New Delhi: Ten days ago CNN-IBN had brought you the story of 38-year-old Prakash Sarvankar who committed suicide after alleged harassment by ICICI bank loan recovery agents. Now the bank has given his family a compensation of Rs 15 lakh. Six-year-old Prajakta was witness to her father being harassed by recovery agents of ICICI bank when he defaulted on a loan of Rs 50,000 which the bank describes as ‘small ticket’. Fed up of the insults, on September 17, Prakash Sarvankar hanged himself and blamed recovery agents of the ICICI bank in his suicide note. The incident evoked strong reactions from activists who blamed the bank for using strong arm tactics. Now the bank has announced an ex-gratia payment to Sarvankar's family which includes a fixed deposit, which will give her about 9,500 a month, insurance of Rs 25 Lakh over 20 years, medical insurance of Rs 4 lakh for Sarvankar’s wife for three years and medical insurance of Rs 3 lakh each for her three daughters for three years. But Sarvankar's widow is still inconsolable. "He is not going to come back," says Priyanka Sarvankar. Consumer organisations welcome the move but demand stricter checks and balances on banks. Credit Consumers Association of India president Vijay Kamble says, “In my knowledge, this is the first time such a payment is being made by a bank." The payment may be an unusual move for, but police say that it will not affect investigations against the bank. For now four men are under arrest for abetting Sarvankar's suicide. One of them is the owner of the recovery agency, and another, Kailash Choudhary, is an employee of I Process and the police are investigating whether senior officials of the bank are responsible as well. Meanwhile, the heat is turning on banks on misconduct of their recovery agents. The RBI backed Banking Codes and Standards Board of India OR BCSBI has stepped in after the recent alleged suicide. BCSBI has shot off a letter to ICICI bank asking if it had done adequate due diligence before appointing the collection agency, whether it had a written contract with the agency binding it to the "Code of Banks' commitment to customers," and what action it has taken against the agency.