THIRUVANANTHAPURAM: AT A time when the state has urged the Centre to exempt plots not exceeding five cents with the house from forced loan recovery under the SARFAESI Act, data shows that co-operative bodies have used the provisions of the same law to recover loans of 651 defaulters since the government assumed office in 2016.
Data from the co-operative department shows the co-operative banks initiated steps to take possession of the collateral of as many as 2,961 people in the state under the SARFAESI Act.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002, allows banks and other financial institutions to auction off defaulters’ residential or commercial properties to recover loans.
Pradeepkumar, deputy registrar of Cooperative Societies, told ‘Express’ that the Act allows even the co-operative societies to put stressed assets up for auction. Mostly, the district co-operative banks and urban co-operative banks are going ahead with debt recovery measures under the provisions of the Act, he said. “The recovered properties do comprise plots less than five cents with houses. However, the number of such cases can be ascertained only after a detailed analysis of each case,” he said.
The recent twin suicide at Neyyattinkara in Thiruvananthapuram and Rahul Gandhi’s letter seeking the state government’s intervention to provide assistance to the family of a farmer who allegedly committed suicide due to mounting debts in Wayanad have once again brought the focus on recovery proceedings under the SARFAESI Act. Earlier, the state assembly had unanimously passed a resolution urging the Centre to exempt plots not exceeding five cents with house from forced loan recovery under the Act.
S Sarma, who heads the assembly panel assigned to study the social impacts of the Act, said the debt recovery measures initiated by the co-operative bodies under the Act had come up for discussion before the panel. “We will submit an interim report shortly after the ongoing assembly session. Final report will be prepared only after a couple of sittings,” he said.
Earlier after the twin suicide here, Speaker P Sreeeramakrishnan had urged the banks in the state to refrain from recovering collaterals of loan defaulters till the legislative panel submits its report.
‘Plan to exempt coop banks from SARFAESI Act ambit’
T’Puram: Chief Minister Pinarayi Vijayan on Monday informed the assembly the state government was planning to exempt cooperative banks from invoking the provision of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI) for revenue recovery. When the opposition said as many as 2,961 legal notices were issued by the cooperative bodies as per the provision of the SARFAESI Act for revenue recovery, the Chief Minister intervened in the discussion and said the government would consider exempting the cooperative banks from the ambit of the Act.