M Santhosh (24), an engineering graduate of Vellore district, got the shock of his life when staff of a private agency barged into his house and asked him to repay a loan of Rs 1 lakh, which he had borrowed four years ago from the State Bank of India (SBI).
“When we asked for their identity, they replied that they had come from a Reliance agency and stated that since they have deposited my loan amount with the bank, I had to pay them immediately,” says Santhosh, who is still searching a job in Chennai.
SBI has outsourced recovery of educational loans from defaulters to Anil Ambani’s Reliance Asset Reconstruction Company (R-ARC). While education loan beneficiaries feel threatened by these recovery agents, SBI union members feel that such a move is an indication that all nationalised banks will be privatised in future.
Meanwhile, SBI associations have expressed dissatisfaction over deploying such agencies for loan recoveries. “Handing over responsibility to get repayment from education loan defaulters is tantamount to handing over the bank itself,” says D Thomas Franco, General Secretary, SBI Officers Association, Chennai Circle. He also added that going by the present scenario in the banking sector, it appears that all the nationalised banks might be privatised gradually.
Another member of the association said, “The bank has sold education loans to Reliance. And, there is a high possibility that other loans like agriculture, jewel and housing loans may be surrendered to the same agency.
Give and take strategy
Sources said, as per the agreement SBI would hand over details of loan defaulters to Reliance who would repay 45 per cent of the loan amount. “The agency would recover full amount from the defaulters stating that they have paid full amount with interest to the bank,” they added.