KOCHI: The Aluva-headquartered Federal Bank has taken possession of a shopping mall in Kodungallur, Thrissur, after the borrower defaulted on a loan amounting to nearly Rs 8.5 crore.
Federal Bank officials said Njarakkattu Basheer, an NRI, took the loan for the four-storeyed Centro Mall. After defaulting on the loan, he started collecting rent from tenants in cash, instead of depositing it directly into the bank account. This forced the bank to take possession of the mall.
The four-floor shopping mall included the basement and had 29 tenants.
Federal Bank invoked the provisions of the SARFAESI Act, 2002, to take over the shopping mall, officials said.
“The bank also invoked the powers of Section 13 (4) (d) and Section 13 (5) of Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 whereby notices were also served on the tenants in the shopping mall calling upon the tenants to remit the rent with the bank,” a statement by Federal Bank said here.
Around 30 officers of the bank’s Recovery Department participated in the action.
Officials said the total dues from the borrower amount to Rs 8.5 crore and the bank took over the mall for the default of the personal loan of Rs 1.5 crore.
A few months back, Federal Bank was in the news when it took possession of an aircraft by invoking the provisions of the Insolvency & Bankruptcy Code 2016 to recover the loan dues. Now the sale process of that aircraft is underway.
The Federal Bank recovery team was led by Babu K A, senior vice president, and Mohamed Sageer T A, vice president, head office. Babu said the bank move should be a warning for other big defaulters who purposefully default after availing large sums from the banking industry. He said similar and more intensive measures are planned against other big defaulters as well.