Facing flak from courts for using brash 'recovery agents' to extract dues from defaulters, banks and financial institutions have now started hiring private detectives to trace people evading loan repayments.
Special agents, as the detectives are called by their employers, do not bully defaulters as recovery agents do, but use sleuthing skills to shadow subjects and help lenders nab them.
Many big defaulters have been traced till now and lakhs of rupees recovered using services of detectives, says a bank official.
"We have been doing it for more than a year. Many private and nationalised banks have approached us and sought our services," said Sanjay Singh, CEO of Indian Detective Agency.
Central and state financial corporations suffer considerable monetary loss owing to defaulters, who usually go without a trace after borrowing huge sums, or simply refuse to repay.
"We have helped them (financial institutions) recover huge sums of money," said Singh.
Banks and others lend crores of rupee every year to individuals and firms, and lose nearly 40 per cent of the money, say bank officials.
Although recovery agencies managed some success in extracting dues, banks have nearly shunned their services after courts and the Reserve Bank took a stern view of the methods employed by them to recover money that is said to have driven many borrowers and their families to commit suicide.
In fact, actions by recovery agents more often than not ended up with the police or in courts, further delaying recovery.