UCO Bank 'names and shames' S Kumars CMD as loan defaulter
09 May 2013
India's state-owned banks, saddled with bad loans, have adopted with a vengeance a 'name-and-shame' policy against defaulters. The latest is UCO Bank, which today went public with the name and face of an industry leader whom it says is a loan defaulter.
In an advertisement published in leading dailies, UCO Bank has issued a notice against Nitin Kasliwal, chairman and managing director of S Kumars Nationwide Ltd, who it says is the guarantor of a Rs110 crore loan taken by Reid & Taylor, the fabric and apparel arm of S Kumars. The ad carries Kasliwal's picture.
State Bank of India took the lead in this direction when it recently published photographs and other details of five loan defaulters who had taken export credit of Rs3 lakh each and failed to repay. But the amounts involved were much smaller than the Reid & Taylor issue.
Kolkata-based UCO Bank has already classified the loan as a non-performing asset (NPA). ''In spite of repeated reminders, requests and persuasion, the borrower has not liquidated the liabilities of the bank,'' it said in the notice, adding the ad had been issued in public interest.
The notice warns the public at large to ''exercise caution while dealing with the said director, guarantor and company in any manner''.
A UCO Bank official said the company had not been responding to reminders to pay the dues. ''Giving notice along with the photo of guarantor is an extreme step after using all normal means to ensure timely servicing of loans,'' the official said.
Meanwhile, two non-executive directors of the S Kumars board, J Balakrishnan and Dara D Avari, have resigned.
A top official with IDBI Bank, which also has exposure to Reid & Taylor, told Business Standard there were delays in repayment, but it was a performing account as of now. ''The fact that one bank has gone public with disclosure will affect the liquidity of the company further,'' he said.
Bank of India, another lender to the company, said all bankers to the company would seek to take coordinated action on the issue.
Reid & Taylor, which once had Bollywood superstar Amitabh Bachchan as its brand ambassador, had plans for an initial public offering of Rs1,000 crore in 2010-11, but this has been shelved under the weak market situation.