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NAGPUR: Autorickshaw driver Kamlesh Sahu, who took to street vending after business was down due to Covid, finally gave up his vehicle to bank’s recovery agents a couple of days ago. He was not in a position to pay the EMIs for the last six months.
Sahu gave a written undertaking saying he was surrendering the vehicle as he could not repay the loan. “They asked me write down and I agreed because there is a little hope the business may come back to usual soon,” he said
Autorickshaw drivers at every parking stand across the city had stories of being hounded by the banks or finance companies’ recovery agents to tell. The major share of autorickshaw finance business is with the non-banking finance companies (NBFCs).
“They call and pressure us for repayment every day. The recovery agents also reach our homes and threaten to take away the vehicle. We plead saying it’s difficult to even make two ends meet these days,” says Brijlal at a stand near LIC Square. “Around eight autos plying on this road have been seized,” said another driver.
Recently, a meeting was held by district collectorate inviting leaders of autorickshaw drivers’ unions and representatives of finance companies. The latter were asked not to be harsh for recovery. The drivers in turn were also requested to cooperate and start repayment at the earliest.
NBFCs executives say they are under pressure to prevent loan accounts turning into non-performing assets (NPAs). “We mainly depend on financing autorickshaws. Large-scale default will leave a hole in the overall balance sheet,” said regional head of a NBFC.
NBFCs had extended the moratorium on recovery till August. As the cycle began from September, repayments have been rather low. If loans continue to be defaulted till November, the accounts will become NPA, said a source.
“Defaults beyond 90 days have to be treated as NPAs. So there is a pressure to avoid default for three months in a row. This is reason we are running after auto drivers asking them to repay as much as they can,” said a NBFC source.
“We are desperately trying to break the default cycle before November,” the source added.
Even as NBFCs denied having seized any vehicle, sources in the organization also accepted some drivers were voluntarily surrendering the vehicles.
The surrender undertaking keeps the finance companies on the safer side, say the drivers. With this, they can say the vehicle was not forcibly taken away.
Dealers said most companies had stopped fresh finance considering the market situation. The three passenger norm has kept the drivers’ earnings low. “In Nagpur, the drivers get decent money if they take in more passengers which is being strictly prohibited these days,” said source in a dealership.
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