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Old 18th November 2011, 21:10   #31
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Quote:
Originally Posted by samyakmodi
we all are ready to do it all, but not ready to accept if the same is done to us OR our family members. and please don't give me a guilt trip of family's safety and all. one should think about all this BEFORE spending the money OR taking the loan.

i might be going a bit too off topic here - but i'll say it again - if you can't afford it, don't think of buying it. buy it only when you are sure you can afford it.
Completely agree with your views. Here in US also, banks are ALLOWED to repossess the car if borrower has not made payments for more than 3 months. Even they have show running on TV called Operation Ripo to make people aware that if they don't pay the car loans, they will be repossessed.
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Old 18th November 2011, 21:17   #32
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

Respect for the law is essential and taking it into one's own hands repugnant for sure, but what Yeldo has said makes perfect sense to me. One of my ex-bosses used to recount how he had, as a newly recruited Management trainee, gone to repossess a BMW belonging to a once-hugely-successful Bollywood star of the 80s and 90s. He was first asked to call the gent, and if no response received, go to the star's home in person, with a suitably threatening-looking escort in tow, to get the vehicle back.

He recounted that the star in question was very polite, did not offer any resistance and quietly went along with the process so that no force needed to be used at all. I can only imagine this to be an exception to the norm because- admit it- as a country we possess probably a higher sense of entitlement and righteous indignation (ESPECIALLY when not warranted ) than any other in the world!

It's a tough call- overall I agree with the courts, because I have had a bank's collection agents land at my doorstep to recover a sizeable debt a past tenant had left behind and believe me it ain't a pleasant feeling! But one feels for the lenders as well- perhaps if India didn't have such a dysfunctional legal system, they wouldn't have to resort to whatever tactics they use these days!
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Old 18th November 2011, 21:18   #33
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

All I can say that private banks must be more stringent in giving loans like the nationalised ones , and not chase unrealistic profits which sometimes ends up in bad loans . The general rules must be the same for all banks and must be strictly followed so u do not end up giving a loan with a emi of 7500 for someone who earns 10000 . If private banks stop being greedy and people stop being unrealistically greedy things would sure be better .
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Old 18th November 2011, 21:31   #34
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

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Originally Posted by hvs View Post
Just tell me why only private banks indulge in such practices...And do they lead the market...NO. Its still the nationalized banks who go by the book, not only while recovering but also while lending...
Tell me how many have gone bankrupt..
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The Private Banks run this as a focused business and profit center. For the PSU Banks it is just another product in their basket. For operational convenience the Pvt Players are focused in Tier 1 & Tier 2 Cities The business model of the Pvt Players is far more robust. Why PSU Banks are not repossessing is pure due to inefficiencies not because they are more human. The PSU banking system still need major equity infusion to meet Basel II norms.
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I wonder why bank is not ready to reschedule & regularize your loan.
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There are very strict guidelines from RBI on rescheduling of loans. Non Performing Assets (NPA's) does not do any good for anyone
You should approach Consumer Forum of your District with the plea that you are ready & willing to deposit the EMIs due but the bank isn't budging.
Quote:
If you have the money pay the EMI. If you default future loans will become difficult due negative marking on CIBIL
This judgement is obviously a delayed case as the said financial institution has not been in the car business for long.

Most Pvt. players take the Arbitration Route which can be equally effective for legal and quick repossession of cars.

Last edited by KPS : 18th November 2011 at 21:37. Reason: Mods : Please delete this post as there is duplcation
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Old 18th November 2011, 21:35   #35
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

Quote:
Originally Posted by hvs View Post
Just tell me why only private banks indulge in such practices...And do they lead the market...NO. Its still the nationalized banks who go by the book, not only while recovering but also while lending...
Tell me how many have gone bankrupt..
Quote:
The Private Banks run this as a focused business and profit center. For the PSU Banks it is just another product in their basket. For operational convenience the Pvt Players are focused in Tier 1 & Tier 2 Cities The business model of the Pvt Players is far more robust. Why PSU Banks are not repossessing is purely due to inefficiencies not because they are more human. The PSU banking system still need major equity infusion to meet Basel II norms.
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Originally Posted by hvs View Post
I wonder why bank is not ready to reschedule & regularize your loan.
Quote:
There are very strict guidelines from RBI on rescheduling of loans. Non Performing Assets (NPA's) does not do any good for anyone
You should approach Consumer Forum of your District with the plea that you are ready & willing to deposit the EMIs due but the bank isn't budging.
Quote:
If you have the money pay the EMI. If you default future loans will become difficult due negative marking on CIBIL
This judgement is obviously a delayed case as the said financial institution has not been in the car business for long.

Most Pvt. players take the Arbitration Route which can be equally effective for legal and quick repossession of cars.

Cheers

KPS
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Old 19th November 2011, 16:48   #36
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

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Originally Posted by samyakmodi View Post
did the bank not give you any soft call OR notice OR anything??
if they did not - then it's wrong on their part to send goons straight away.

you can't afford it at one shot - that's the reason you take up a loan. then you can't afford to pay the emi - that's when the bank needs to take a tough stand. on what grounds are you protesting?
Sir What I am protesting is that the Bank is not giving an OPPORTUNITY to clear my dues. I did not willfully default. I am willing to repay the Loan Amount. But the Bank does not have any right sending goons to my house to catch my neck and demand to pay it one shot. Bank should recognise such genuine case and give an opportunity to clear the Loan.

God Forbid. If you had taken a Loan, paying EMI regularly, one fine day you land in hospital and did not pay EMI for five months. Obviously you would request the Bank to give time to clear your since you were in hospital. But that does not mean that Bank can send goons to hospital or your house and threaten you to clear you dues.

There are such thousand cases like me wherein the Defaulters are willing to pay, but with Banks sending goons and resorting to such criminal activities, this Scenario will continue.
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Old 19th November 2011, 22:03   #37
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

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Originally Posted by Sarvodaya View Post
Sir What I am protesting is that the Bank is not giving an OPPORTUNITY to clear my dues.
How many EMI's were pending when the goons arrived? Technically it is called a bucket. If for example you have 3 EMI's pending then you are in the 3rd bucket.
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Old 20th November 2011, 12:20   #38
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

Slightly off-topic,
but certain pvt banks & financiers also hire & send goons to recover home & personal loans although we have SARFAESI ACT for home loan default & most of personal loans or small ticket personal loans are insured..
Are ther also justified in these cases also...?
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Old 24th November 2011, 13:39   #39
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

There's no right or wrong side here. Banks knowingly give loans to 'credit-risk' individuals to create business, and lots of people take loans 'hoping' to clear it, rather than having a concrete repayment plan in place. Some people take loans knowing full well they can't or won't repay it.

Banks need to put a lid on their greed for more business, and people need to put a lid on their greed for stuff they can't afford. Unfortunately, trust plays no part in business. Genuine cases (of unwilling default) also go through harassment because it's impossible to trust people in a market where everyone is looking to pull a fast one.
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Old 24th November 2011, 16:16   #40
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

Diamond cuts Diamond. Have a baseball bat handy and start theratening goons whoever comes to home. If you have power to counter act this is the only way else loose your property. Dont get shy because of this act. I heard some recovery agent kept in room for 2 days when he asked to pay for the remaining loan amount. Finally he pleaded and ran away without turning back. If you got power dont feel shy to twist their arms.

Regards,
Vijay
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Old 24th November 2011, 17:42   #41
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

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Originally Posted by vijaycool View Post
If you got power dont feel shy to twist their arms.
Quote:
Originally Posted by Sarvodaya View Post
If you had taken a Loan, paying EMI regularly, one fine day you land in hospital and did not pay EMI for five months.
Are we really defending the defaulters?? Non paid EMI for five months? Man, what if your boss falls ill and doesn't pay your salery for five months? As per your logic, you must give him time to recover! God forbid five months illness!

Quote:
Originally Posted by KPS View Post
How many EMI's were pending when the goons arrived? Technically it is called a bucket. If for example you have 3 EMI's pending then you are in the 3rd bucket.
This seems a much better way that needs to be cleared and accepted upfront. Three strikes and your are out.

I personally have no sympathy for the defaulters, except for the rare cases when the bank misplaces the post-dated cheques and then tries to blame the loan taking person! Otherwise, this law will enable the goons to shamelessly default, and add yet another case to a never ending list of pending ones.
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Old 24th November 2011, 18:20   #42
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

Most people don't really intend to 'cheat' when it comes to vehicle loans.
Sometimes peer pressure leads people to buy a car beyond their capacity on loan or unexpected events result in reduced capacity to pay EMIs.

What people need is financial education and a sense of discipline.

In fact, many who deliberately cheat, get away because they play the system very well.

The situation is a lot worse in case of credit cards. Most recovery agencies in India are owned or backed by politicians, retired policemen etc who are very keen on maximizing profit and don't care about anything else.

It is a well coordinated nexus between recovery agents, bank officials, police stations and lawyers.

In case of post dated or blank cheques, these are again exploited to the maximum in order to harass and collect the most.
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Old 25th November 2011, 02:03   #43
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

In India every deal is done like - 'Either you screw me or I will screw you' and afterwards 'Government will screw both' kind of attitude. Best example is credit cards.
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Old 25th November 2011, 06:29   #44
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

Sorry to hear about your case Sarvodaya. I think the bank in question should have a process of dealing with special cases such as yours.

Having said that, I'm perplexed by how many otherwise sensible people I personally know who take on more debt than they can handle. Its like a person who has been deprived for very long is suddenly left loose in a candy shop and wants to gorge on everything. You see people buying the latest gadgets, mobile phones, cars, etc... without thinking about how they're gonna make the payment for it.

Whats worse is that this mad spending is fuelled by the irresponsible marketing campaigns by our banks. They keep on selling the installment schemes in an effort to trap you into a never ending maze of debt. How many of us feel that we are working only for the banks? Damn, we get our paychecks on the 1st and by the 5th, a huge portion of that has gone towards paying our loans. Nothing left to pay for our day to day expenses, so bring out the plastic again. This is a mindless neverending cycle.

These are not new issues, they've been highlighted time and again in books like Rich Dad. I strongly suggest that we all resist the urge to take on more debt.

Samyakmodi and the others supporting the banks, well, I am against defaulters, and I think all borrowers should pay up. Now will you please enlighten me of how many banks have gone bust due to non payment of car loans? None so far. These same banks that do not think twice before sending goons to collect their dues are refusing to part with information on their corporate borrowers who have defaulted. Also, do you see them sending goons to collect from Kingfisher? Do you know that they have converted significant amounts of KF debt to equity at Rs.64 per share? Current market price is Rs.25, Funny na, how we are more than willing to beat the crap from the small time borrower and treat the big guy with kid gloves.

Will you please preach to Mr.Mallya not to buy his toys and blow money on bombshells that actually belongs to the bank?
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Old 25th November 2011, 06:58   #45
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An unfortunate judgment from the Supreme Court, based on a clear lack of understanding of economics. Let's be clear. In the case of a hypothecation, the vehicle belongs to the bank. It has the right to recover its property. It's the borrower who is maintaining forcible possession of the banks property after defaulting. Ideally, the bank should be able to get the police to recover the property, overnight, with a simple complaint. In the absence of even a moderately effective judiciary and police, banks are forced to take possession of their own property using agents. But this judgment effectively criminalises that action. The result, as many have pointed out, is that there will be fewer lenders around, especially for low value small cars and bikes, where the cost of recovery would be more than the potential income on the loan.

Though I must say it amazes me that people buy consumption items like cars and bikes on loans at market interest rates. I used a loan for my first car, but that was because my company gave a loan at 3% and would not (in those days) cash the difference out if I did not use it. But borrowing at mid to high double digit rates for a consumption item is a recipe for disaster.

As for why people do not act against corporate defaulters, it's because of the difference in the legal structure of the loans. But the fact is that credit spreads for Indian corporates are also higher than they would have been if we had even a moderately competent judiciary.
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