Back in 2014, Anand from Thanjavur took out a home loan of Rs 9 lakh from a City Union Bank branch in the city. At an interest rate of 11.5%, Anand went abroad to earn enough to pay the loan back. In 2019, he had to return to India, and when the COVID-19 pandemic hit the world, he lost his employment and income. The bank however continued to harass him to pay his EMIs, according to Anand’s family. On August 29, the 43-year-old set himself on fire outside the City Union Bank branch and died soon after, having suffered 92% burns.
The bank was threatening to take away his house and constantly harassing him, despite the RBI moratorium on loan repayments due to the pandemic, according to Anand’s family. Dhaynidhi, Anand's 29-year-old brother-in-law tells TNM that the family begged the bank to give them some leeway due to the lockdown, but they refused. Instead, bank employees allegedly abused Anand and insulted him over the requests.
Anand was a father of two, a welder who was getting no income during the coronavirus lockdown. He is among several people in the state who have allegedly faced harassment from banks in the last months, over the inability to pay the fixed interest for loans. Anand's family says they were tortured by the bank to repay the pending interest.
"Anand had taken a loan of Rs 9 lakh in 2014 from the bank to build a house. He was working in Dubai and was sending money to repay the loan," says Dhayanidhi, adding that while the interest was set at 11.5%, he is unclear on the term of the loan. "Over the years he has paid back Rs 13 lakh but when he fell ill in 2019, he had to come back to India. He was working for Rs 650 a day in a local factory and still managing to pay interests. But when the lockdown began, the factory completely shut down and his family had no source of income. But the bank was refusing to understand this and threatening to take away the house," he says.
According to the family, the bank employed multiple methods to harass them including bringing potential buyers to the house on a regular basis.
"They started bringing some men first to threaten my brother-in-law. Then they came with buyers to see the house when my sister was alone and demanded to be let in. It was mental torture for them," says Dhayanidhi. Anand apparently owed the bank close to Rs 6 lakh and managed to somehow scrap up Rs 3 lakh and took it to the branch. "But when he got there they said he has to pay a minimum of Rs 5 lakh or that house will be taken into their control. He begged them not to do it because the family's reputation will be destroyed. Anandhan had worked very hard to build that house and when he told them this, they insulted him. They asked why he needs a wife and children when he can't even pay back the interest for the loan properly," alleges Dhayanidhi.
When the insults continued, Anand threatened to take his own life. And when authorities did not take him seriously he proceeded to immolate himself in front of the bank.
"My sister (Anand's wife) is devastated and scared," says Dhayanidhi. "They have two young children aged 10 and 7 and she doesn't know how they can even move forward from here. We are all in shock. The bank employees who pushed Anand to this stage despite the pandemic should be arrested," he adds.
The family says that Anand had already sent a petition to the Chief Minister and District Collector but received no response. Across the state, residents allege that private banks are continuing to harass them despite the Supreme Court's orders.
On May 29 for instance protests broke outside a Bajaj Finance branch in Coimbatore district after customers were fined for skipping payment of instalments. Protesters alleged that money was taken from their accounts without consultation, towards the loans. They were forced to deal with bounced cheques and threats from the bank over their credit score, for delaying payment despite the RBI announcing a moratorium.
Not just individuals, even industries are allegedly facing harassment from banks at a time when they have just reopened for business.
KV Kanakambaram, president of the Industrial Estate Manufacturers’ Association in Guindy (Chennai) says that the pressure to pay back loans has been continuous even through the lockdown.
"They keep threatening to classify the manufacturing unit as a non-performing asset if we don't do the interest payments," he tells TNM. "When we put money in the account for other purposes, they take that towards the loan repayment. Now things will get worse since the RBI's six month moratorium has ended. Banks have already started issuing auction notices. Our only hope now is for the courts to intervene," he adds.
The Supreme Court is currently hearing a batch of petitions seeking a waiver of interest on deferred EMIs during the moratorium period. The Centre has however argued that such a waiver will weaken the banking sector. But petitioners have pointed out that forcing borrowers who are just recovering from the effects of the lockdown to immediately pay the accrued interest would not be fair.