November 28, 2006	Tuesday	Ziqa'ad 6, 1427

KARACHI, Nov 27: With the sharply increasing delinquency ratio of 5 to 10 per cent on auto-leasing the banks have come up with employing goons in the recovery operations to settle with their defaulting customers, it has transpired.

Intruding into the houses in the middle of night in armed state or paying visits to the clients in their houses and offices is often the standard procedure these recovery agents follow to re-possess the vehicle or to recover defaulting payments on different leased products.

“Of course, they inform the area police station before carrying out the recovery operation because in some cases the customers try to outsmart the banks by registering an FIR of car snatching,” divulges a recovery officer of a private bank requesting not to be named.

In majority of cases the recovery officer comes from an influential background--having affiliation with political parties, a progeny of law enforcement officials or having a background of armed forces.

Technically speaking, these recovery agents are termed the third party contractual and they are often outsourced by human resource consultancy firms, insiders said.

They are commissioned-based manpower hired on a basic salary ranging from Rs4,500 to 5,000. For instance, if a Toyota Corolla (XLI) costs Rs1.1 million the recovery agent would get one per cent of the price of the (XLI).

Thus, more the recovery the greater the amount of commission, explained an insider.

They apprised that usually the recovery departments follow three stages of recovery process.

Initially, on missing the first installment or payment, girls, who have been hired, especially for the task of calling the customer and reminding him or her about the lapse of installment in a very polite manner.

On the second lapse of installment the bank technically, has the right to pick up the auto, but the most banks use their male staff, which pays visit to the house and offices demanding the payments in an asserting manner.

On the third default banks act and re-possess the vehicle by hook or crook, insiders said.

If the customer has disappeared the banks trace the references, which were furnished by the customer at the time of applying for the loan.

Legally, banks could not act against the references; they only try to extract the maximum information about the defaulting customer.

It may be added here that when the recovery agents come to re-possess the vehicle, usually they don’t come quietly; they make a hue and cry telling the people in the neighborhood about what is happening.

However, sometimes recovery personnel indulge in unnecessary intimidation.

Recently, on October 16, a resident of PECHS Block 2 lodged an FIR at the Ferozabad Police Station stating that a day earlier the complainant--Mrs Sadia Moosa-- wife of Mr Moosa Raz--was alone in the house when two persons came to her house.

One of them--Tariq Aga--identifying himself as an employee of the ABN Amro bank barged into the house using abusive language and demanding payment. The FIR stated that on arrival Mr. Moosa called police helpline 15.

The complainant stated in the FIR that she had obtained a loan from the ABN Amro bank on soft terms and was repaying the installment, still some employees of the bank kept harassing her, Station House Officer of the Ferozabad police station told Dawn.

The two suspects--Tariq Aga and Tasuwar--were arrested and after remaining on police remand they were sent on the judicial remand, now they have been bailed out, the SHO added.

A senior banker said that almost every bank was offering many products. Many people avail more loans than they can repay and land themselves in trouble.

Recently, the State Bank of Pakistan issued a regulation: Central Information Bureau (CIB) provides the customers’ profile as to how many products he or she has availed from different banks.

This information is now being utilized by the private banks, while processing the loans.