Banks have been advised against harsh steps in loan repayment cases: FM

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New Delhi: Union finance minister Nirmala Sitharaman on Monday said that the government has advised banks across the public and private sectors not to resort to harsh actions in cases of loan repayment. Speaking in the Lok Sabha during the question hour, Sitharaman said that banks have been told to deal with such cases with sensitivity and through a humane approach.

''I have heard complaints about how mercilessly loan repayments have been followed up by some banks. The government has instructed all banks, both public and private, that harsh steps should not be taken when it comes to the process of loan repayment and they should approach the matter with humanity and sensitivity in mind,'' Sitharaman said.

She further said that the government has given the directive through the Reserve Bank of India. In another instance, responding to a question on some banks charging ‘exorbitant’ interest rates, The minister of state for finance Bhagwat Kishanrao Karad said that the government does not interfere on the matters of interest rates on loans provided by banks.

Karad added that the board of a bank or its officials takes decisions on interest rates and not the government, adding that the Centre has rolled out a number of schemes to help common people get cheaper loans.