Vizag steel plant employees caught between the devil and the deep blue sea

With the bankers hounding them to repay EMI loans and warning them of action due to continued default, the employees’ plea for a little consideration has turned out to be a cry in the wilderness, and they attribute their plight to late payment of salaries by the management

Published - May 16, 2024 08:49 pm IST - Visakhapatnam

An aerial view of the Visakhapatnam Steel Plant.

An aerial view of the Visakhapatnam Steel Plant. | Photo Credit: File Photo

Almost every family of the 13,333 employees, who include 8,999 non-executive and 4,334 executive cadres, of the Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), are said to have been spending sleepless nights due to the alleged torture of the bankers for the past few months.

The bankers, the employees allege, want them to repay the Equated Monthly Instalments (EMIs) of the loans availed of in the past, or face action.

The employees are alleging that the bankers have been sending messages, emails, and even making phone calls to remind them of default on loan EMIs. The bankers are also allegedly warning them of deactivating their debit and credit cards, and add them to the list of defaulters. Furthermore, the bankers are allegedly threatening the borrowers with non-payment of principal interest for more than three months to make their loans as Non-Performing Asset (NPA).

While the executive employees have home and car loans, the non-executive cadr have home and bike loans.

Auction threat

“I have availed of home loan from a public sector bank. I am unable to pay EMIs due to non- payment of salaries on time by my company. I have a home loan principal amount of ₹3 lakh. I have requested the bankers to give exemption as everyone knows the status of my company. But the banker has warned me of auctioning my house. If this is the situation of a senior employee like me, one can imagine the situation of others, particularly low-salaried and junior employees,” says Varasala Srinivasa Rao, a VSP employee and general secretary of the plant’s JMS union.

Agreeing with Mr. Rao, another younger executive employee, on condition of anonymity, says, “We are concerned about the CIBIL score because of the defaults in the payment track of EMIs on my loans. Senior employees can close loans by taking hand loans (non-banking loans), if needed, but what about us. If our bank accounts are in the list of defaulters, no banker will not come forward to give us loans in the future for children’s education, marriage, or other basic needs of a middle class family.”

Our company has earned ₹591 crore this month by selling its products from May 1 till May 16, but till now not a single rupee has been paid towards salary, they lament.

“To deposit the net salary, around ₹70 crore is enough, but the company has not taken any step to apportion that amount from this month’s revenue,” says another employee.

Speaking to The Hindu, A.S. Rambabu, former director of Central Bank of India and general secretary of All India Bank Employees’ Association, said, “When a loan becomes NPA, the bank has the right to confiscate the asset or property purchased through the loan. The bank can auction the property. If one fails to make payment on a bank loan, problems such as reduction in credit score (CIBIL) begin, and other miserable things will start.”

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