Defaulters better pay up

Bechara industrialists. They must be having sleepless nights these days. Who would have thought that the toothless, servile bankers would overnight change their spots? Clearly, the SRFAESIA (or the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) is the root of all the problems. Remember the good ol'' days. When getting money from banks was as easy as taking a candy from a child - especially if one was politically connected. Siphoning the disbursed money and putting it to various kinds of personal use was also very easy. So what if non-performing assets and bad loans ballooned to impossible levels of Rs 110,000 crore? So what if the honest tax-payers'' money went down the drain year after year to write off these loans? Clearly, the mantra of ''Borrow now, Repay never'' was the chartbuster chant for a sizable section of the industrialists. Cut to the present. SRFAESIA -- which empowers the banks/financial institutions to attach and seize mortgaged or hypothecated property, if a defaulter fails to respond to recovery notice within 60 days -- is fast turning out to be the proverbial thorn in the flesh for such people. It isnâ€™t that the Act happened overnight. When the lenders realised that their requests for loan repayments are not getting anywhere, they got together and formed a consortium of lenders. Many appeals later, it seems that government agencies are finally getting their act together. Seizing the assets of an industrialist - as politically and otherwise connected Ficci president A C Muthiah - would have been unthinkable even a couple of months back. While the Mumbai DRT action has been prompted by a suit filed by ICICI Bank, there are other instances where the Tribunal has taken tough steps. In early February, the Delhi DRT had ordered Daewoo Motors India to pay the Exim Bank a sum of Rs 144.66 crore for failing to pay up the bankâ€™s dues. The order showed that even the Indian subsidiary of the famed South Korean chaebol needed to adhere to Indiaâ€™s new tough financial guidelines. Or, take the instance of how Atul Nisharâ€™s plans to sell Aptech came unstuck. Nishar, who promoted Aptech, had stood guarantor to State Bank of Travancoreâ€™s (SBT) loan to Apple Credit. The latter defaulted and SBT took him to court. The result: Chennaiâ€™s DRT restrained Nishar from selling his Aptech shares to SSI, another software company. The writing on the wall is clear: Defaulters better pay up, or else...

Defaulters better pay up

Bechara industrialists. They must be having sleepless nights these days. Who would have thought that the toothless, servile bankers would overnight change their spots? Clearly, the SRFAESIA (or the Securitisation and Reconstruction of Financial As...

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