05 May,2010 07:55 AM IST | | B V Shiva Shankar
Recovery agentsu00a0call on HR departments of companies to tell on employees defaulting on EMI commitments CV Giddappa, the General Secretary of The Credit Card Holder Association of India, says instances where companies have sacked employees for defaulting are on the rise.
TaLking tough with a recovery agent or defaulting on your home loan EMI or credit card debt could cost you your job.
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Banks are taking the HR route to recover debts from defaulting clients and companies, who fear that undisciplined debt management of their employees reflects badly on their image, have taken to showing erring employees the door.
Latest trend
"It is the latest trend," said lawyer CV Giddappa, the general secretary of the Credit Card Holders Association. "The bankers sound out employers who promptly sack the employees.
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They blame such employees for denting the company image by defaulting on loan repayments. The banks narrate instances where borrowers have lost jobs in this manner to make clients pay up.
We know that banks are doing this on a wide scale because I have received many complaints from professionals who have been sacked in this manner of late."
Giddappa, who says he can't reveal details of suits he has filed against banks and employers who have sacked employees in this manner for fear of harming the employees' careers.
Shobha (name changed), an IT professional, was called by her manager halfway through a project.
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The manager asked her to resign because she had defaulted two installments on a personal loan worth Rs 5 lakh she had taken from HDFC bank.
The recovery agents had called on the HR department. "I was not allowed to give my version," said Shobha.
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"It was not a secured loan and the company had no stake in it, but this did not stop the company from sacking me. However, since it was I, who handed the resignation letter, I am not in a position to take them on legally."
Folded up
Viteos, a call centre, is known to have sacked several employees in this manner.
Nikhil, a manager of the company, said, "We are concerned about the reputation of the company. We have not however, sacked any employee on basis of their bank loan record."
Viteos folded up recently and thousands of its employees were rendered jobless.
Giddappa revealed that Cognizant, IBM, L&T were among companies who had sacked employees who had defaulted on loan EMIs.
Hard times
Rajeswari (name changed), an employee of IBM, had to resign after State Bank of India officials complained to the company's HR department that she had defaulted on her credit card payment.
Santosh (name changed), senior engineer with L&T, was similarly asked to resign after he defaulted on repayments on a personal loan taken from HDFC Bank.
Rajeswari and Santosh are hunting for jobs as their dues are piling up and they have no source of income.
| The Other Side |
| While an HR executive from Cognizant denied the fact that they had sacked employees who had defaulted on loan repayments, HR officials from IBM, L&T remained unavailable for comment. Representatives of HDFC and SBI could not be reached for comment despite repeated attempts. |
