Monday, November 05, 2007

Rule of the Law

I was more than pleased to see the Delhi Consumer Commission take stern action against ICICI Bank. Credit recovery in India is a nightmare, and understandably so. Often, individuals often abscond after failing to pay back the loans they have taken from banks. Recently, the Supreme Court had passed a ruling strictly prohibiting the use of force during recovery of loans. ICICI, being the premier bank of the nation, should be ashamed of its actions.


 

I have heard stories from friends and relatives alike as to how goons would stand in front of their houses threatening to beat them up because a payment on a car/house loan was delayed. The banks in India have no way of differentiating a missed payment with a delayed payment. Moreover, in spite of all the hype about IT systems, they seem to be oblivious to the difference between loyal good customers and absconders, because their systems do not have the little intelligence required to differentiate the two groups.

Above and beyond the Commission's interference the stock market seemed to have just shrugged off the ruling. Being a public company, ICICI is responsible not just to its shareholders, but to the public in general if it fails to obey the law. I wish the investors realize this and penalize ICICI accordingly.

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