In 1995, Citibank cardholder Deepak Gandhi accused a collector of threatening to have one of his kidneys removed and sold unless he paid his overdue Rs 15,000 bill. The collector was blacklisted by Citibank, but he's back with a new company and carries out jobs for other banks.

Dresswala says he pleaded for time, and the men said they would return in three days, warning that he must pay them then or face the consequences. When they came back, waiting with him were undercover police.

``They came in and started threatening,'' says police officer Vanaik Vast, adding that one of the three visitors told the shopkeeper: ``I want the money right now or I will kill you.''

The police arrested the three and later accused them ofextortion and making terrorist threats. The same accusations were filed against the head of the collection agency, known as Quality Consultants. And the credit-card debt? It was owed to Citibank, which had hired Quality Consultants to collect the overdue account.

Citibank officials in Mumbai express skepticism over Dresswala's claims, noting that no knife was recovered and that he still hasn't paid the debt -- around Rs 11 lakhs -- for use of a dozen cards by four family members. The bank says that all the debt collectors it retains, whom it calls ``customer-assistance specialists,'' are well-trained, carefully monitored and required to follow a code of conduct that prohibits threats or other abusive behavior.

In the Gandhi case, Citibank initially stopped hiring that collector, Abdul Qadir Shukri, but brought him back after concluding that the story was false. Shukri also denies it.

Now Shukri stands accused in the shopkeeper's case, as well, because he is the owner of Quality Consultants. In fact, thereason he formed Quality Consultants was that Citibank didn't want to do business with him under his old firm's name. He denies wrongdoing and says he doesn't use threats or other improper methods.

Citibank had intended to stop using Shukri again, though not until the end of June, so he could finish up some other accounts. A couple of days ago, the bank said it had ``permanently terminated'' its contract with Shukri after learning he hadn't come clean about his background.

Citibank isn't the only credit-card issuer to draw complaints. In November, Mumbai resident Shrijiv Bhattacharya won a temporary injunction barring agents working for Standard Chartered from harassing him or entering his workplace, after he claimed they barged in when he wasn't there and told his colleagues he would be beaten if he didn't pay a Rs 70,000 bill.

And Prapanchan Krishnan, a data processor, says an agent working for Standard Chartered told him in March that unless he paid a Rs 30,000 bill at once, his case would be turnedover to a man who ``breaks bones to get people to pay.''

Standard Chartered's head of consumer banking, Harpal Dugal, was quoted in April as saying that the bank had ``never had a case in which we were accused of using strong-arm tactics'' to collect debts. Later, asked specifically about the Krishnan and Bhattacharya allegations, Dugal denied that any threat was made in either case.

Although neither involved Shukri, Standard Chartered sometimes uses him. In fact, it first started doing so while he was suspended by Citibank over the Gandhi kidney-removal allegation. Moreover, after suspending Shukri following the Dresswala incident, Standard Chartered says it has decided to resume using his services, though at a reduced level.

It's not an easy market for foreign companies to enter; the debt outstanding on all credit cards jumped 29% last year, there aren't any credit bureaus, and banks are just beginning to share consumers' credit histories. So bad accounts abound: About 10 per cent of all bill amountsbecomes delinquent. And, when all else fails, the legal system is sluggish.

Foreign companies also complain that the general lawlessness in Mumbai provide ample cover to customers seeking to exploit the traditional suspicion of multinationals by falsely claiming to have been mistreated.

Lenders here often hand their most delinquent debts to outside collection agents, who are paid a portion of what they recover. But debt collection, too, is different in India than in the West. ``There is no rule,'' says Mumbai collector Swran Salaria. ``You can do anything.''

Some collectors openly boast of their innovations. B R Shetty, whose agency is called Unique Recoveries, says he has hired several eunuchs to show up at debtors' offices and homes and embarrass them into paying.

Citibank says it not only avoids agencies that use such tactics, but has recently invested in an in-house collection department staffed by university graduates. But it has continued using various outside collection agencies inIndia.

Though the banks say complaints are usually isolated cases and not indicative of a general problem, the Mumbai police disagree. However, they do admit that most people are reluctant to press charges against bill collectors because they don't want it known they are in debt. Pradeep Shinde, senior inspector with the Mumbai police's anti-extortion squad, says, ``It is a fact there are a lot of complaints, but unfortunately no one is approaching the police.''

(By arrangement with The Wall Street Journal)