Their properties to be attached if they fail to respond to Modified OTS
Amounts of depositors with Rs.1 lakh to Rs.5 lakhs to be reimbursed in eight half-yearly instalments from March 3Attachment of properties of defaulters to begin in February
HYDERABAD: The Charminar Co-operative Urban Bank Ltd. has issued notices to top 50 borrowers who owed Rs.240 crores to the bank for attachment of properties if they fail to respond to the Modified One Time Settlement Scheme (OTS).
The bank will disburse amounts to depositors with Rs.1 lakh to Rs.5 lakhs deposits in eight half-yearly instalments as per the G.O. MS. NO.4. The first instalment of Rs.8 crores will be paid to 5,587 depositors on March 3.
One time payment
Disclosing this to media persons here on Monday, the bank's new Managing Director and Joint Registrar Khaleel Khan, who had taken the charge a week ago, said that the bank was sending a proposal to the Government to amend the GO.Ms.4 and make a one time payment (instead of eight instalments) to depositors with amounts not exceeding Rs.50,000. Such a proposal would benefit 2,799 depositors and it would cost the bank only Rs.5.5 crores while it had Rs.50 crores cash at its disposal. "It would bring relief to small depositors," said Mr. Khan.
Emphasising that the bank would be tough with the defaulters hereafter, Mr. Khan said that sale of movable and immovable properties pertaining to 14 of top 50 defaulters would be held in February. The properties of another 32 would be attached in March, and the remaining four in April.
Stating that the modified OTS gave an advantage to the borrowers as nearly 50 per cent of their outstanding amount would be waived as only 11 per cent simple interest was being charged. Under the scheme, borrower would have to pay 10 per cent outstanding amount as down payment and remaining amount by December 2007 in monthly instalments. Civil and criminal action would be initiated against borrowers if they did not respond to OTS by February 28.
While the bank was to get Rs.419 crores from 1, 865 borrowers, it recovered only Rs.106 crores so far. But under OTS scheme, the amount to be recovered would be slashed to Rs.219 crores due to lesser interest. So far 215 borrowers responded to OTS, he said.
The board would also examine the plea of 272 depositors with deposits above Rs.5 lakhs for repayment from March itself in eight half-yearly instalments of Rs.50,000 each, he said.
President of NRIs' Association and depositor Mohiuddin A. Taher said that the decision to fix 11 per cent simple interest under the Modifed OTS would be detrimental to the interests of the depositors. He said that as the bank paid an interest of 16 per cent to the depositors from 2000 to 2003, it should collect at least 18 per cent from them for the same period under the OTS.