Now, banks to ‘name and shame’ guarantors of loan defaulters

Concerned over rising bad loans, bankers have started publishing names and photos of guarantors of defaulted loans as well in newspapers. However, there is no clarification on the selection criteria of either the defaulter or guarantor

Close on the heels of banks publishing photos of borrowers who have defaulted, the lenders have decided to give same treatment to guarantors of such defaulted loans too. However, there is no clarity about the selection criteria of such guarantor, who has provided guarantee to a borrower for loan. 

 

Banks, mostly public sector lenders have decided to ‘name and shame’ the guarantors of such borrowers as well by publishing their photographs and other details in newspapers and at notice boards of bank branches and community centres.

 

Several state-run lenders are at the forefront of taking such measures. Those already making public the photographs and other details of loan defaulters include the country’s biggest lender State Bank of India (SBI), UCO Bank, Allahabad Bank, Indian Bank and Indian Overseas Bank (IOB).

 

On Tuesday, Allahabad Bank published photographs of two guarantors as well in the newspapers as part of a public notice for sale of two properties mortgaged for the loan. The borrower, a corporate entity, had failed to pay it dues and the total outstanding amount currently stands at over Rs365 crore.


SBI began publishing the pictures of its individual loan defaulters in March this year, while UCO Bank has also went public with the name, photograph and other details of a well – known industrialist for non-payment of loans by his company.

 

Even the Bangalore Municipal Corporation has not hesitated to use traditional drum-beaters to shame some of India’s best corporate brand names into paying up property taxes. In January this year, it collected Rs19 crore from the IT giant Wipro Ltd, which paid up but has contested the claim. It has also successfully targeted five-star hotels, such as Le Meridien and Ramada Hotel, for a few lakhs of rupees.

 

According to bankers, the photographs, names and addresses of the guarantors would be published in newspapers if the dues were not cleared within 15 day of the notice containing particulars of the original borrowers.

 

Earlier this month, finance minister P Chidambaram asked banks to focus on top defaulters and take action against them. He said, “You (bankers) focus on the top defaulters, as well as keep an eye on the top performing accounts... They are keeping a close watch on the top 30 non-performing accounts in each bank and action will be taken on the defaulters,”

 

Non-performing assets (NPAs) of banks have been on the rise for past several months due to slowdown in the economy.

 

The gross NPAs of some public sector banks, including State Bank of India and Punjab National Bank have crossed 4% of the total assets at the end of March 2013.

 

Gross NPAs of PSU banks have risen to Rs1.55 lakh crore as on December 2012 from Rs71,080 crore as on March 2011.

 

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    COMMENTS

    vineeth kumar

    8 years ago

    To be fair & frank, totally agree that reduction of NPA's is in the best interest of our country. I'm pretty sure that majority "CLASS" of India the "Middle Class" would take proactive options & cooperate with the said banks to clear-off pending.
    But, I do not agree to the methods adopted... default is a default. Re.1/= or Rs. 1 Cr.
    Kindly inform us the Qualifying criteria for financial obituary? In case, the accumulated liability grows @ Geometric Proportion, only, because of the FAILURE of Judicial System including Honorable Supreme Court of India - the last & final resort for people like us. I don't need to know the reasons for Justice Delayed, I'm interested in RESULT (for or against-absolutely better than facing death, every second), may be IO's are under instructions, to delay as much as possible. Very sad to say that "The Honorable Supreme Court of India has allowed itself to be mocked by law enforcement agencies puppetry, to ensure DELAY in justice. Very sad that SCI has not bothered about repeated request to deliver justice - Not a penny more; Not a penny less - retrospective payment, clear off my only loan & let me (us) live in peace or at least RIP. I would like to understand, can an ordinary taxpaying citizen, who respected the 'law', can file some concrete case or PIL against the Apex Court (Excuse my ignorance of terms or legal language) for failing in disposing a case, which may force many to take an emotional step. I would request the concerned banks to have a macro reasons and not look at the amount defaulted...to err is human, but, 90% of factors are not in the control Human Beings.
    I'm really fed up with this failed system - where, an individual’s lifetime is spent on the corridors of SC of India.
    No amount of Your NPA's can replace the TIME lost Mr. P Chidambaram...please grow up, please learn to be EMPATHETIC, to so many soul's dying every second.I know, you don't have time for Positive Governance.
    I don't expect much from you or the system as of now...unless, "Jasmine"...let there be chaos...order will follow.

    Regards

    pinakin mamtora

    8 years ago

    But,what about the elite/bulge size defaulters? One such high profile high flier was mysteriously "accommodated" by the top Indian banks by converting his dues in to equity shares at Rs.65 a share some time back. Today, those very shares are quoting at Rs.5 only. It is tax-payers/account-holders' hard-earned money that goes down the drain & yet not a word on it by anybody! Why no 'name & shame' in such brazen defaults?

    Vaidya Dattatraya Vasudeo

    8 years ago

    It is too good to be true. Why not start with top 100 Defaulters from each PSB and Co-op Banks, particularly from Maharashtra. Some news paper should spare a whole for a fortnight or so for this purpose. If government does not force banks to do it, people should do it under RTI. Sponsors are required for advertising.

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