Crosshairs by Sucheta Dalal

FSLRC's Approach Paper is impractical to implement

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Kejrival ends stir, to start fresh campaign against Khurshid

Kejriwal also alleged that there was a quid pro quo between the Congress, which is supporting Khurshid, and SP chief Mulayam Singh Yadav who is facing a disproportionate assets case in the Supreme Court

New Delhi: Social activist Arvind Kejriwal and a group of disabled people on Monday called off their four-day-old protest in Delhi against Union Law Minister Salman Khurshid and announced a fresh campaign against him in his Uttar Pradesh constituency Farrukhabad from 1st November, reports PTI.


Kejriwal also alleged that there was a quid pro quo between the Congress, which is supporting Khurshid, and SP chief Mulayam Singh Yadav who is facing a disproportionate assets case in the Supreme Court.


Announcing the end of his protest at Parliament Street, Kejriwal claimed that they have not received a response from Prime Minister's Office (PMO) for an appointment and now they are shifting their battle to Farrukhabad.


"Now the volunteers will go to Farrukhabad. We are getting more documents against Khurshid. Public will make a disabled person fight against him in the next elections and defeat him," he said.


Claiming that Congress and other parties like BJP and SP have been "exposed" in the fight against corruption, he also targeted Manmohan Singh.


"He too has been exposed. He does not speak. Congress and BJP are hand in glove. In a couple of days, (BJP chief Nitin) Gadkari will be exposed," he said.


He said if the country has Right to Reject as Anna Hazare demands, then these people will not get elected.


"During this Dussehra festival, we should not burn the effigies of mythical Ravan (and Meghdhoot and Kumbhakarna).


Let us not burn their effigies. Let us select three people who are Ravans of the present," he said.


He also said that they will participate in a Mahapanchayat of farmers where they will expose alleged links between Robert Vadra, DLF and other companies in land deals.


He appealed Delhiites to switch off their lights for an hour in the evening on November two to protest against power tariff hike in the capital.


On Uttar Pradesh government's probe into the alleged irregularities of Dr Zakir Hussain Memorial Trust run by Khurshid and his wife Louise, he said the Minister and the father-son duo of Yadav and Akhilesh will bail out each other.


Khurshid has denied the allegations of irregularities in his NGO.


"There is enough evidence building up but the question is who will conduct an investigation. Akhilesh Yadav? A case of disproportionate assets is pending against his father Mulayam Singh in Supreme Court. Who will appoint the government lawyer against Mulayam? The Law Minister will do.


"Now Khurshid will save Mulayam Singh and Mulayam's son will save Khurshid," he said addressing IAC activists on the fourth day of their protest at Parliament Street demanding Khurshid's resignation.


Kejriwal presented a disabled person who alleged that he was not provided any help as claimed by the NGO.


"Why is the Congress defending Khurshid's NGO? What is the relationship? Is it Khurshid's NGO or is it the Congress party's NGO? The party is definitely involved somewhere," he said.


Levelling fresh charges against Khurshid, Kejriwal alleged that one Pankaj Kumar from Mainpuri whose name figures in the list of beneficiaries did not get any help from the NGO.


"The document given to government says he has been provided with a hearing aid. But he has problems in his legs.


He was not given any hearing aid," Kejriwal claimed in the presence of Kumar.


Kumar also said he had not received any hearing aid though he did not need it. "I have problems with my legs and not ears," he said.


Vivek Yadav, an activist from Mainpuri, claimed that they had searched for beneficiaries in the locality of Dewar block but they could not locate two names -- Santosh Kumari and Sasi Mohan -- who were provided with wheel-chairs.


The name of another beneficiary Dayaram, who had an eye surgery and is not a handicapped person, also figures in the list, he alleged.


The activist also claimed that he had spoken to one of the officers whose signature has been allegedly forged by the NGO and asked him to join his group.


"The officer now says he does not remember what exactly happened. This is UP politics. One by one all evidences are being erased. Give ten more days and there will be no proof.


The enquiry has already been done. Why we need one more enquiry?" Kejriwal said.




5 years ago

Kejriwal Vs Khurshid

Mango Vs Banana !

Is publishing photos of home loan defaulters correct?

Some lenders are publishing photos of home loan defaulters, that too when the home is mortgaged with them and the borrower is reported to credit bureaus which ensures that he or she would not get funding from any legal sources

Several banks are publishing photos of borrowers who have defaulted. Every day there are advertisements by banks to dispose off properties of people who have taken a loan and could not repay in time. While banks have been publishing photos of corporate borrowers, who had defaulted, several lenders have now started publishing photos of home loan defaulters as well. There is a difference between a borrower who had taken loan for buying a home and other borrowers who got a loan for business purpose.
The question is—is it morally right on the part of the banks to publish photos of home loan defaulters. The recovery is being undertaken under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFAESI Act). This Act was enacted presumably on the lines of the Article 9 of US Uniform Commercial Code (UCC). The Act is, actually, nowhere even close to that Code. In fact, UCC deals with personal property and not real estate, and therefore, home loans are not at all covered by US UCC Article 9. The Act was recommended before the Parliament as one which would help reduce the burden of bank NPAs (non-performing assets). The picture one got was those so-called ‘wilful’ defaulters who habitually over-borrow from banks, siphon off the money, possibly even before the loan repayment starts, and enjoy life at the cost of banks. In other words, the objective was to be stern against promoters of companies that go sick while promoters enjoy the pink of their own health. Little did the parliamentarians who passed the law realise that the law will be used, as it is being done, vehemently to drag home loan borrowers out of their homes. 
No one contends that a borrower should be allowed to go scot free after having borrowed money from a bank or housing finance company, even if it was purchase of a residential house. But is a default of a home loan a case of wilful default that was in the minds of the lawmakers when the SARFAESI Act was enacted? Is it difficult to envisage that there may be zillion reasons for which a borrower may be forced to default on loan EMIs (equated monthly instalments)? Once again, financial discipline is important, and it is a settled fact that home borrowers who are unable to pay their EMIs have to suffer foreclosure at some stage. There are hundreds of thousands of such homes under foreclosure action in the US today, and therefore, no one should shed tears if borrowers have to face a mortgage foreclosure on account of default of a home loan.
But then, the SARFAESI Act puts a non-judicial route to mortgage foreclosures. The way the section is worded, a home borrower will first have to lose the roof over his head before he can run to his lawyer to take an action in a DRT (debt recovery tribunal). One just needs to take a practical stock of the situation—a person having a salary income of Rs30,000 per month takes a loan that has an EMI of Rs10,000 per month. The ratio works perfectly fine since a debt to income ratio of 33% is one of the best a lender can expect. Also, given that a household can easily manage living costs within a range of Rs10-Rs15k per month, there is sufficient scope for the individual to pay his home loan without default. Now, say, he loses his job. It obviously will take a few months before he can get a replacement job, particularly in a market as the present one. So, three EMIs missing, and the bank classifies the loan as a NPA. The bank sends a loan recall notice, demanding not just three EMIs, but the whole of the loan. And in the meantime, the bank starts adding penal interest, which is much higher than the loan interest rate. 
The issue is, where does the individual, out of job and facing his own worries in life trying to find a new job, get the money from, to pay the bank? Not just the EMIs, but the lethal penal interest rate too. So, as would always happen—debt begets debt. He would possibly run to a usurious lender, and borrow at excessive interests to pay the bank off, but sooner or later, will get into a default at both the places.
Here comes the bank with a SARFSAESI notice—pay off the entire loan, along with penal interest and all other charges within 60 days, or face repossession. 
The tragedy is that the individual can run to no one for rescue. He would often run with a pleading face to the branch manager, but the manager would say—the matter is out of control now. 
Now think of remedies available. Is it unlikely that the borrower may have questioned the very claim of the bank? Is it unlikely that the bank might have added wrongful costs or charges which the individual may be disputing? Thanks to the Supreme Court ruling in Mardia Chemicals, the law gives the borrower a right of representation, but the right of representation is a mere lip-service, as the representation goes to the very bank or bank manager with whom the borrower has an issue. The law does not even require the borrower’s grievance to be handled by a senior office which can examine the matter dispassionately. Invariably, if at all the borrower makes a representation the answer from the bank is going to be mechanical—turning down the representation with a stereotyped rebuttal of whatever the borrower might have said.
So, can the borrower approach his lawyer and seek a redressal? Unfortunately, as the law seems to say, the borrower must first allow the bank to take action (read, take away the borrower’s house) and go for redressal before a DRT. DRT action may stretch for months together. To add to the injury, the DRT may also pass an order for pre-deposit of a large part of the amount demanded by the bank before the application can proceed. The irony is—if the borrower had the money to pre-deposit, why would he let the loan default anyways? But law is merciless, regardless, and concern-less.
Banks are also publishing photos of corporate loan defaulters. Almost every day you would find ads with names and photos of small time firms, traders, owners of SMEs and so on.

Banks are adding insult to the injury by publishing the borrowers’ photographs in the newspapers. This is simply outrageous. The matter was discussed in a Madras High Court ruling where the high court affirmed of the practice, but the issue was mainly on the grounds of borrowers’ privacy rights, bank secrecy laws, and so on. Our courts have still not got rid of the mindset that when a borrower defaults, he is not necessarily defaulting because he is not wanting to pay, but because he is unable to pay. Also, over the decades of the way the banking system has worked, courts are simply unable to appreciate the miseries of the retail borrower failing to pay a consumer loan. Therefore, it is a little surprise that the Madras High Court judge said: “If borrowers could find newer and newer methods to avoid repayment of the loans, the banks are also entitled to invent novel methods to recover their dues.” This indicates that the publication of the photo of the borrower is also a recovery device, whereas, it was not pointed out before the court that the photo is published only after the recovery action has been taken. 
Repossession action having been taken, the question is—why would a bank at all want to do a further damage to the borrower by publishing his photograph too? Surely enough, it is not the photo of an India’s most-wanted terrorist to caution the public. If the idea is to caution other lenders, that is taken care of by credit information bureaus like CIBIL or Experian as the financial system is anyway entitled to their database. In any case, other lenders don’t lend by looking at the photo of the borrower. One would understand if default of a loan was a criminal offence, but first, a loan default is a civil wrong and not a criminal wrong, second, no one could hold a person liable of having done a crime other than a criminal court, let alone a commercial bank, and third, even in criminal wrongs, for the most heinous crimes, courts do not go all out to publish photographs. 
Irrespective of legality involved in such publication, what is happening currently is outright wrong. Our brethren who have fallen victims of bad times and are anyway deprived of the roof over their head are being further driven into ignominy by putting their photographs in the newspapers. This is so very cruel, so very inhuman, at least in case of residential mortgage loans. The Reserve Bank of India and the National Housing Bank should put an end to this practice immediately.





4 years ago


The home loan and education loans are coming under welfare category. When a citizen of mid class or service class or poor class GET such LOAN to have a shelter or develop their education. But the industries and big business group get loan to develop their financial status and to earn. Hence the rule of publishing photo and following stringent recovery rules under the guise of NPA rule is not justified because there should be some difference between government policy and Local Money Lender. Presently the banks are after small educational loan or house loan debtor but leave big fishes who borrow several crores. The Honurable Supreme Court also commented and referred a words of “ No action Against BIG FISH but against SMALL FISH” in some Cases.

098430 65011


4 years ago

I agree with the author.When recovery proceedings are initiated by taking possession of securities and filing of a suit in DRTand the matter is sub judice, publication of photos is not called for and can be termed as abuse of powers, as hapless individual cannot fight with institutions. Such name and shame policy simultaneously with the judicial process erodes -- and not supplements-- the powers of courts. While sharing information on defaults is consented to by the borrowers, such publication of photos may not be covered under the agreements executed.
How about publishing simultaneously the photos of bank officials who sanctioned and monitored these loans for the general information of public.


4 years ago

A very few case need such act of Publication of photographs.
We should definitely think of financial discipline. If it does not exist, the economy may collapse.
We are developing economy, we can not afford to lose like US where thousands of banks shut down and left with hard earned money of public.

Vinod Kothari

5 years ago

Thanks for the comments. However, some commentators are missing the point that the bank is not publishing the notice of default; that notice is neither required nor done. The bank is publishing the notice of having seized the property. So, after having taken recovery action and taken symbolic possession of the property, what is the bank intending by publishing the photo? Question quite often is not what is wrong in it; the question is what is right in it.
I made a special case of home loans; that is where the pain of dispossession is the maximum, but in principle, my opinion is applicable on all loans.

Sucheta Dalal

5 years ago

I am surprised at the comments. Indeed banks are quick to name and shame and print pictures of borrowers.

As a member of the services committee of one bank, I can tell you that defaults are minimal in housing finance unless there are extraordinary situations. That is because nobody wants to lose the roof over their head.

On the other hand, there is dubious lending that leads to defaults. Here, the banker is just as culpable. Some scandalous cases, where a nationalised banks lent to 100 people on the same set of photocopied documents are carefully kept away from the public eye.

And, the main question is ... will banks dare to shame large borrowers in the same way? Which bank chairman is taking responsibility for Vijay Mallya's Kingfisher, or Deccan Chronicle or hundreds of others?

After the SARFESI Act, banks have used their power only against the mango people. Lets not lose sight of that. In fact, lets campaign for bank chairmen being held personally responsible for some of these loans -- it will ensure two things.
1. They wont lobby and pay to get the chairman's job.
2. They will not listen to politicians and dubious CAs, because their lives will be more important.



In Reply to Sucheta Dalal 5 years ago

I agree with you. To a great extent, quite a few CAs ( US Embassy calls them - Convenient Accountants) are responsible for big NPAs / frauds / and Corruption advice. Look how DLF has spread the payments to Vadhra. Do you think any one other than a CA can think of such dubious methods. I wish CVC comes after the Top Bankers for King Fisher NPA.


5 years ago

But, the same Banks do not publish pictures of big industrialists / directors who have defaulted despite their personal guarantees.

R Balakrishnan

5 years ago

Irrespective of the reasons or the circumstances, the fact is that there is default. Defaulter should not object to his becoming (in)famous. As it is the lenders are portrayed as monsters, for the single fault of lending to the wretched borrower. If he cant pay, he should be able to suffer all insults. The way to avoid his loss of face is to pay up on time or simply give up the asset.


5 years ago

The banks are right and you cannot take a high moral ground.
It is not true that (as your article says), with just three months EMIs in arrears, the house would be lost or that the photo will appear.
The borrower can always make representations and take time.
The number of cases where borrower lost his job etc is very minimal.
You may do an analysis of the borrowers whose photos have been published and their source of income and maybe the % of salaried class who defaulted would be hardly any.
If the borrower is keen that his photo doesn't get published, why wait for the bank to sell off the house.He can as a last resort sell the house himself and buy another house when the position improves.
Why blame the lender who in good faith lent the money.Banks as you yourself say (maybe in other articles) are the repositories of public money.Let them take what are fair and legit recovery means.
However they should employ the same recovery methods for all borrowers including Dr Vijay Mallya.

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