The death of a 55-year-old farmer in Tiruvannamalai district, after he was unable to repay a loan borrowed from the State Bank of India, has sparked widespread debate. 

Relatives of the deceased farmer allege that Gnanasekaran, a resident of Thanipadi, suffered a heart attack after being accosted and brutally assaulted by men sent from the bank on Saturday.

District authorities, however, claim that the agents were the ones who were attacked. When they met the farmer to seize his tractor for non-payment of dues, this version states, a heated war of words ensued, where 'unparliamentary language was used', and escalated into assault. 

But the common thread in these contrasting narratives, is an illegality that cannot be denied – the use of recovery agents by banks. 

In a landmark judgement in 2008, the Supreme Court had reiterated that banks cannot deploy musclemen for recovery of loans from defaulters. According to the court, complaints received by the Reserve Bank of India regarding violation of the above guidelines and adoption of abusive practices followed by banks recovery agents would be viewed seriously. The court took the opportunity to remind banks and financial institutions that, “we live in a civilised country and are governed by the rule of law.”

Then why was a bank owned by the State government blatantly flouting the SC's diktat?

"Yes, the court has made it clear that agencies are not to be used. But at the ground level, the situation is complete different," admits Tiruvannamalai Collector Kandasamy.

"Every bank here is associated with a loan recovery agency and this can only be corrected if there is a policy decision made at the top levels of the bank. The local manager here is merely following orders for non-performing assets," he says. 

For the family of the farmer, such an explanation does not suffice, and they have demanded the arrest of the agents and the manager who sent them. 

"We have not been able to cultivate any crop on our lands due to drought and that is why we were unable to pay back the loan," says a relative of Gnanasekaran.

The farmer had borrowed Rs 5.2 lakh is 2011 and bought a tractor with the money. "We told the bank about this several times but they simply did not care," he alleges. 

Relatives further allege that the recovery agents pretended to be bank staff, but abused them when they demanded to see their identification cards. 

"We have arrested one of the recovery agents named Raja in the case. But we have to conduct further investigations to see how exactly the manager is involved," says the Collector. But he argues that merely arresting the manager will not lead to change at the ground level. Farmer unions, however, disagree. 

"When a bank in a district of Tamil Nadu refuses to respect the Supreme Court order, what does it tell you?" asks Dheiva Sigamani, Head of the Tamil Nadu Vivasayi Sangangal Kootu Eyakkam.

"It shows a complete breakdown of the system where a miserable farmer is constantly targeted. The Supreme Court should take up this case suo motu and teach these banks a lesson by using this example," he asserts.

This is not the first time that Tamil Nadu is seeing alleged cases of harassment by recovery agents. In May 2016, a farmer in Tamil Nadu’s Thanjavur district was beaten up and his vehicle snatched away by loan recovery agents of a private finance company for failing to pay up two installments. 

The incident, which was caught on camera, created uproar amongst the farmer community. Even the police were allegedly involved in the assault. 

Reacting to the recent developments, PMK leader and former Union Minister Anbumani Ramadoss told IANS, "It has become a habit for bankers to send goons to threaten borrowers of education and tractor loans. RBI has clearly said banks should adopt legal means to recover outstanding loans."

Ramadoss added that the banks, unable to recover thousands of crores of rupees lent to industrialists like Vijay Mallya and big companies, are levying new charges on their ordinary customers.

District authorities in Tiruvannamalai meanwhile are preparing to organise a closed door meeting between farmers and bank authorities to thrash out detail of loan payments. "Farmers are suffering due to the extreme weather conditions and banks need to give them a chance to pay their dues. Harassment from either side will not solve any problems," says the Collector. 

However, when questioned about the issue, All India State Bank Officers Federation President D Thomas Franco Rajendra Dev maintains that they are, "against hiring of recovery agencies for individual loans". 

He argues that, in Gnanasekaran's case, the bank had proposed a one-time settlement, where the borrower has to pay 50% of the dues to get the loan account closed. But Gnanasekaran did not agree, he claims. 

"When our crops don't grow, we have no income. So where is the question of returning money?" questions Gnansekaran's son-in-law. "Why are we treated like thieves when we are helpless?" he asks.