Coimbatore: The Citizens Voice Coimbatore has written to the Central and State Government highlighting the distress caused by the pandemic and the exorbitant interest being charged by private money lenders.
Coimbatore: The Citizens Voice Coimbatore has written to the Central and State Government highlighting the distress caused by the pandemic and the exorbitant interest being charged by private money lenders.
Citizens Voice Coimbatore President, C M Jayaraman and V A Shanmugam state in the letter, "In our Government, a new policy was formulated to promote more rural and semi urban areas where every citizen will be able to open bank accounts compulsorily, even with zero balance. This was very useful for the poor and needy who are below the poverty line, to open a savings bank account and process all transactions including availing of educational and gold loans etc., through their bank accounts and receive benefits from the Government's schemes."
"Nowadays, many banks have started insisting on maintaining a minimum balance, failing which exorbitant charges are recovered from the customer’s account which ultimately drains the account with a debit balance. Under these circumstances, added to the Covid pandemic situation and protocols, many banks have begun facing difficulty in granting gold loans and that too only on selected days. This becomes handy for private money lenders and pawn brokers to fleece the poor and downtrodden, and trap them into many miseries.
Adding fuel to the fire, they charge exorbitant interest rates which make the 'Below Poverty Line' people helpless. They dispose their jewels without proper notice or following usual procedures. Normally such private money lenders should obtain a license from the State/Central Government under Shops and EstablishmentsAct etc. Besides the lack of this control mechanism, there is also indiscriminate advantage being taken of these malpractices. It is high time that the pawn brokers are strictly advised to adhere to procedures being followed by cooperative banks and other banks, so that the interests of the consumers are protected," they reiterated.
The letter stated the procedures that are in violation of consumers' interests which are as follows:
Blindly getting loan papers signed without allowing to read or providing a copy of documents.
Escalation of rate of interest after 90,120,150 days without subsequent reminder to the borrowers.
Not sending due notices before the account becomes overdue and classified as NPA through registered post with acknowledgement.
Publishing in newspaper before conducting of auction in the presence of notary or advocate, qualified (gold) jewel appraiser along two prominent citizens/customers.
After public auction, informing the defaulted borrower viz. all details including sale value less principle, interest and any other dues to the bank and finally crediting to the customer’s account.
The executives of the Citizens Voice Coimbatore expressed their hope in the letter that authorities would take a pragmatic approach and issue, review/necessary guidelines to all concerned.
Citizens Voice Coimbatore President, C M Jayaraman and V A Shanmugam state in the letter, "In our Government, a new policy was formulated to promote more rural and semi urban areas where every citizen will be able to open bank accounts compulsorily, even with zero balance. This was very useful for the poor and needy who are below the poverty line, to open a savings bank account and process all transactions including availing of educational and gold loans etc., through their bank accounts and receive benefits from the Government's schemes."
"Nowadays, many banks have started insisting on maintaining a minimum balance, failing which exorbitant charges are recovered from the customer’s account which ultimately drains the account with a debit balance. Under these circumstances, added to the Covid pandemic situation and protocols, many banks have begun facing difficulty in granting gold loans and that too only on selected days. This becomes handy for private money lenders and pawn brokers to fleece the poor and downtrodden, and trap them into many miseries.
Adding fuel to the fire, they charge exorbitant interest rates which make the 'Below Poverty Line' people helpless. They dispose their jewels without proper notice or following usual procedures. Normally such private money lenders should obtain a license from the State/Central Government under Shops and EstablishmentsAct etc. Besides the lack of this control mechanism, there is also indiscriminate advantage being taken of these malpractices. It is high time that the pawn brokers are strictly advised to adhere to procedures being followed by cooperative banks and other banks, so that the interests of the consumers are protected," they reiterated.
The letter stated the procedures that are in violation of consumers' interests which are as follows:
Blindly getting loan papers signed without allowing to read or providing a copy of documents.
Escalation of rate of interest after 90,120,150 days without subsequent reminder to the borrowers.
Not sending due notices before the account becomes overdue and classified as NPA through registered post with acknowledgement.
Publishing in newspaper before conducting of auction in the presence of notary or advocate, qualified (gold) jewel appraiser along two prominent citizens/customers.
After public auction, informing the defaulted borrower viz. all details including sale value less principle, interest and any other dues to the bank and finally crediting to the customer’s account.
The executives of the Citizens Voice Coimbatore expressed their hope in the letter that authorities would take a pragmatic approach and issue, review/necessary guidelines to all concerned.