New Delhi, Dec. 25: The Bangalore-based Canara Bank said it has initiated debt recovery proceedings against 450 defaulters. It will send default notices to these parties who have defaulted on the liability amount.
“We have identified around 450 out of a total 700 parties who have an outstanding loan amount with us...this will total to around Rs 400-450 crore,” H.R. Shenoi, general manager of the recovery wing of the bank, told The Telegraph.
“We have already sent notices to around 10 to 15 defaulters who have more than a Rs 10-crore liability with the bank,” Shenoi said. “The bank will now seize their assets and auction them to recover the dues if they do not come to us for settlement.”
Armed with the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Canara Bank has started this exercise. The Act allows banks to seize and sell property belonging to the defaulters without getting mired in the courts of law.
Earlier, the Supreme Court had ordered a stay on the Bill, which precluded banks from creating third party interest in assets they had seized from corporate loan defaulters.
But with the President’s approval the Bill has become an Act and have automatically lifted the apex-court’s stay order. Defaulters will now lose the right to appeal to the courts-of-law against takeover of their assets by the lender-banks or financial institutions.
Shenoi said, “Any recoveries on the existing provisioning of NPAs will straightaway add to the bottomline and lower the NPA level to around 2.5 per cent from the current level of 3.8 per cent.”
The bank has reported a growth of 13.9 per cent (compounded annually) on deposits and 18.5 per cent growth on advances.