The American Repossessor

The government is working on framing new set of guidelines to address the issues of repossession of vehicles by banks and financial institutions in case of default by borrowers.

“Vehicle repossession is an issue, in which honourable courts have their views, and RBI has guidelines. But, we are again working on those issues, because that is one of the main important things about the commercial vehicles, and that is under our focus now,” Heavy Industry Additional Secretary Surajit Mitra told reporters here.

He said the government will sort out the repossession issue.

“Solution is very simple that you bring out an alternative framework of repossession of vehicles, which we are working on,” Mitra said.

The automobile industry has been complaining that banks have become reluctant and tightened their procedures for vehicle financing which has impacted auto sales.

Society of Indian Automobiles Manufacturers has said despite the stimulus packages easing of liquidity situation has not have the desired effect on the auto sector as banks are still cagey to provide loans to customers for buying vehicles because of repossession issue.

The RBI already has guidelines on recovery agents and when contacted an RBI official said the central bank is not working on any new norms.