Solan’s Baghat Urban Cooperative Bank moves to seize properties of defaulters
The process to seize properties of 15 major loan defaulters of the Baghat Urban Cooperative Bank in Solan has gathered momentum after the Deputy Commissioner (DC) granted formal approval to initiate proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.
Facing crippling restrictions imposed by the Reserve Bank of India (RBI), including a Rs 10,000 withdrawal cap per depositor since October 6, the bank is now stepping up its recovery efforts in a bid to restore financial stability and depositor confidence.
Bank Managing Director Rajkumar said the process of taking possession of 15 mortgaged properties had begun following the DC’s consent and these would soon be put up for auction. “We are committed to recovering the pending dues at the earliest,” he said.
In a parallel move, the Assistant Registrar, Cooperative Societies (ARCS), has issued arrest warrants against 13 other defaulters collectively owing Rs 30 crore. Solan SP Gaurav Singh confirmed the action, stating: “We have received warrants against 13 individuals who must either clear their dues or face arrest.”
The bank’s financial health, however, remains alarming. With Rs 137 crore locked up as non-performing assets (NPAs), its gross NPA ratio has soared to 47.10 per cent, far above the healthy benchmark of under 2 per cent. The net NPA stands at 12.91 per cent, signalling deep-rooted financial distress.
Officials revealed that 499 borrowers had availed loans totalling Rs 290 crore, of which Rs 138 crore had turned into NPAs. Of this, 50 borrowers alone owe Rs 72 crore. “We are focusing on recovering from these 50 individuals first, as their repayments could significantly improve our balance sheet,” said a senior official.
Another Rs 42 crore remains tied up in arbitration cases before the ARCS under the SARFAESI Act. The bank has also sought RBI’s nod to proceed with the auction of two properties to recover Rs 2 crore after the curbs halted earlier recovery actions.
A crucial meeting of the bank’s Board of Management and Board of Directors is scheduled for tomorrow to finalise strategies to steer the bank out of the financial crisis.
The 10-branch cooperative, which serves nearly 80,000 customers in Solan district, has been dogged by controversies. In April 2021, the RBI imposed a Rs 15 lakh penalty on it for violating norms related to NPA classification and subsequently froze its loan disbursement operations.
Now, with confidence among depositors waning, the management faces mounting pressure to prove that it can recover dues even from politically influential borrowers and rebuild trust in the institution.
Himachal Tribune