Ruffian Loan Recovery Agents Out On The Prowl | UnBreak the News with Prema Sridevi | Ep:91

Loan recovery agents ran over a farmer's pregnant daughter by a tractor in Jharkhand for not repaying a loan taken from a private firm. The father and the daughter ran after the recovery agents, begging and pleading with them not to take the tractor away, but the agents used the same tractor to run over the pregnant woman who succumbed to her injuries. 

The private company, Mahindra Group's CEO said the company is saddened at the human tragedy and will investigate the matter. Not just Mahindra, many companies across India also deploy these unruly ruffian elements to recover loan amounts whenever there is a delay or default in payments. 

Who gives these agents the authority to abuse, threaten, assault and sometimes murder the common man? We track down a company that indulges in illegal loan recovery tactics like many others. Prema Sridevi UnBreaks this News for you!

(Produced below are the transcripts of the video explainer from Episode: 91 | UnBreak the News with Prema Sridevi | Title: Ruffian Loan Recovery Agents Out On The Prowl) 

Loan recovery agents ran over a farmer's pregnant daughter by a tractor in Jharkhand after the family failed to repay a loan taken from a private firm. The father and the daughter ran after the agents, begging and pleading with them not to take the tractor away, but the agents used the same tractor to run over the pregnant woman who succumbed to her injuries. The private company, Mahindra Group’s CEO, said in a statement that the company is saddened at the human tragedy and will investigate the matter. Not just Mahindra, many companies across India also unleash unruly ruffian elements to recover loan amounts whenever there is a delay or default in payments. Who gives these agents the authority to abuse, threaten, assault and sometimes murder the common man? Let's UnBreak this News! 

A 27-year-old pregnant woman Monika Devi was run over by a tractor by loan recovery agents working on behalf of the Mahindra Group. Monika, the daughter of a farmer, Mithilesh Mehta, succumbed to her injuries following the incident in Bariyat village in the Hazaribagh district of Jharkhand. The family owed around 1.3 lakh rupees to the finance company. On Thursday, one of the recovery agents called the farmer and told him that his tractor was being seized because of the loan non-repayment. The father and daughter ran after the tractor, pleading with the recovery agents not to seize it. But the recovery agents ran the tractor over the pregnant woman, which resulted in her death. 

"An incident occurred yesterday within the Ichak Police Station, where people from the finance company came to take the tractor. During this process, a woman was hit by the tractor and died while getting treatment. We have taken cognisance of the incident. Based on the complainant's letter, we are filing an FIR, and I have ordered the Station In Charge to register an FIR under murder charges and investigate further," said Manoj Ratan Chothe, Superintendent of Police, Hazaribagh. 

The farmer Mithilesh Mehta is a man with disabilities. According to the police, Mithilesh had received a message on his mobile phone on Thursday asking him to pay 1.3 lakh rupees which he allegedly owed to the company. Mithilesh was threatened and told that his tractor would be taken away if he refused to pay the sum. It is reported that when the agents were taking the tractor away, the farmer said he was willing to arrange 1.2 lakh rupees somehow and clear the pending loan immediately, but the agents said they would not heed till the remaining 10,000 rupees was paid. Monika is believed to have lost her life over the inability of the family to pay 10,000 rupees.

The company Mahindra Group disassociated itself from the crime and blamed the third-party collection agents for the mishap. Dr Anish Shah, MD and CEO of the Mahindra Group, said in a statement: "We are deeply saddened and disturbed by the Hazaribagh incident. A human tragedy has occurred. We will investigate this incident from all aspects and will also undertake an examination of the practice of using third-party collection agencies that have been in existence."

But Mahindra's case is not a standalone instance. In India, many companies choose recovery agents or collection agencies based on how much they can deviate from the laws and use strong-arm tactics to recover the loan amount. In the past, concerns were raised by many quarters against numerous illegal loan platforms in the country that use predatory recovery practices on vulnerable people. Desperate people in need of money visit these illegal loan delivery apps, as these companies do not scrutinise documents as banks do and deliver quick loans at the click of a button with the least hurdles. But the catch is that the apps charge heavy interest rates, and once the borrower defaults on loan repayment, ruffian recovery agents are unleashed on them.

The Probe tracked down a loan delivery app that was indulging in such fraudulent, illegal recovery techniques. The app states: "users can apply for a Credit Loan of up to Rs.50,000. For example: If you borrow Rs.10,000, the annual interest rate is 12%, and the borrowing period is 365 days with a processing fee of Rs.50, the interest you need to pay is Rs.10,000 x 12% = Rs.1200. Monthly payment: Rs.933, monthly principal: Rs.833, monthly interest: Rs.100."

What the app doesn't mention are the illegal recovery techniques it uses to recover money from the borrower. We are told that once the borrower gets his loan sanctioned, these mobile apps also get full access to the contact list of the borrower. If the borrower delays or defaults on payment, the recovery agents call the family members, relatives, friends, coworkers and associates of the borrower to harass and intimidate them.

The Probe reached out to a victim who was subject to such harassment. The victim's relative received the following message from the recovery agent on behalf of the loan app platform. "Hello Sir/Mam, this is to inform you that your relative had taken a loan of Rs.10,000 from our company, and while taking the loan, he had entered your number in the reference. Now he is not in our contact, that's why I have sent you this message. If he doesn't pay, then we will do a police case against him. Then you will also have to go to the police station for enquiry. So, you will have to inform this guy, too, and stay away from this guy."

While the loan recovery agents in many cases have resorted to threats, abuse, assault, and sometimes even murdering the borrowers or their family members, there have also been many instances where the borrowers have taken the extreme step of committing suicide owing to non-stop pressure and harassment.

This month, a couple in Andhra Pradesh's East Godavari district committed suicide by consuming pesticides after they were harassed, threatened and pressured by loan recovery agents. In another case, this month, a 47-year-old man committed suicide in Gurugram after being harassed by agents.

This week, the Enforcement Directorate froze over 46 crores worth of funds of merchant entities kept in online payment gateway accounts following raids against a Chinese-controlled investment token app. This month, the Gurugram police also arrested a few suspects in connection with a Chinese loan app racket. In August, the Congress party had alleged that several Chinese Apps had syphoned off 500 crore rupees after duping lakhs of Indians and claiming the lives of 52 people.

A few days ago, the Reserve Bank of India (RBI) announced it would come out with a whitelist of all illegal loan apps operating in the country. In August, the RBI also issued a circular related to outsourcing of financial services and enlisted the responsibilities of regulated entities who employ such recovery agents.

The circular notes: "It has been observed that the agents employed by REs have been deviating from the extant instructions governing the outsourcing of financial services. In view of concerns arising from the activities of these agents, it is advised that the REs shall strictly ensure that they or their agents do not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and/ or anonymous calls, persistently calling the borrower and/ or calling the borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations."

The Supreme Court had earlier asked the banks not to take coercive steps against farmers for loan recovery. Often borrowers face extreme harassment for not repaying a loan of as little as 1000 rupees. In the Jharkhand case, there are not many takers to Mahindra Group's claims that the third-party collection agencies were responsible for the incident. The unruly recovery agents, third-party collection agencies and their masters must be brought to book before more innocent lives are lost.