The acquisition of bank loan defaulters’ properties through the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act methodology, is all set to get speeded up in the district because of a recent court verdict.
“The very recent Madras High Court verdict gives the District Collector the lone authority to issue orders to take possession of properties under the SARFAESI Act, exercising Collector’s powers as District Magistrate, which was earlier done through the courts,” Lead District Manager R. Rajagopal told The Hindu .
Bad loansThe statistics obtained from the Lead Bank sources indicate that the overall bad loans portfolio of all banks put together presently hovers above a staggering Rs. 800 crore in the district.
The new development, according to banking sector officials, will help the banks to quickly reduce their non-performing assets through the recovery of properties of the defaulters.
“Swift recovery is the need of the hour considering the rising risks faced by the banking sector owing to decline in the asset quality,” said bank officials.
At present, two cases of bad loans to the tune of Rs 100.16 crore — that of two nationalised banks — are before the District Collector, awaiting the requisite orders for acquisition, Lead Bank sources said.
The District Consultative Committee for Banking Development had issued a directive to all banks to take steps for recovery of bad loans so as to enhance the credit ratings.
