Recovery agents cannot resort to activities of using criminal force against card holders for recovery of dues : Banking Regulation Act, 1949.

The Chief Justice of Andhra Pradesh High Court received a
telegram from the president of All India Credit Card Members Association,
Hyderabad complaining that the recovery agents of HDFC Bank have illegally
detained one Prof. Murthy and the officer of Police Station has illegally acted
in that regard. Acting on the telegram, the Court observed that harassment by
the recovery agents of banks for recovery of amount due under the credit cards
is not the solitary instance.

The Court further held that recovery of any amounts due from
customers of banks should be by method known to law or a fair practice of debit
collection, which has approval of Reserve Bank of India, which enjoins the
overall supervisory and monitoring power over all banks in the country. Taking
notice of the criticism about the illegal methods being adopted by certain banks
issuing credit cards for recovery of debts due under credit cards, Reserve Bank
of India issued certain guidelines to be adopted by all commercial banks issuing
credit cards and which are employing recovery agents for collection of dues. It
was categorically observed in guidelines that banks or recovery agents should
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 the privacy of credit card holders’ family
members, referees and friends, making threatening and anonymous calls or making
false and misleading representations. Therefore, banks or recovery agents
employed by them have to scrupulously follow the guidelines issued by Reserve
Bank of India in the matter from time to time and they cannot resort to
activities of using criminal force against the cardholders for recovery of the
amounts due. If any such criminal force or harassment is made by the banks or
the recovery agents employed by them for recovery of amounts due under credit
cards, the affected card holders will have a right to take recourse to law by
lodging a complaint with police or can move competent Criminal Court having
jurisdiction by filing a complaint as required u/s.190 and u/s.200 of the
Criminal P.C. Whenever such complaints are lodged by credit card holders
suffered at hands of gundas/recovery agents employed by banks for recovery of
amounts due to banks under credit cards, the concerned police shall register
complaint and after due investigation file necessary reports before competent
Court having jurisdiction over matter.