BoR takes action against unruly defaulters
13 July 2002
Mumbai: Bank of Rajasthan (BoR) has initiated strong actions against all its recalcitrant defaulters, including the Bangur group, for recovery of dues.
The bank management has filed criminal and civil cases in various courts and debt recovery tribunals against the defaulters and has started taking over the management control of the corporate defaulters, on a war footing.
The first victim was Rajasthan Breweries Ltd (RBT). The bank has taken over the management control of RBT and invited tenders to sell or lease out the business of the defaulter. RBT owes around Rs 16 crore to BoR.
BoR chairman Pravin Kumar Tayal says: We have taken over the management control of RBT. We will continue similar kind of action against all our defaulters.
BoRs move is based on the recent powers given by the finance ministry to the banks under a new ordinance called Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002.
The ordinance gives banks sweeping powers to tackle defaulters. The banks can now change or take over the management, supersede the board of the company, sell or lease out the business of the defaulting borrowers, and take possessions of the secured assets. BoR has also filed 185 cases against the Bangurs, the former promoters of the bank, in New Delhi, Jaipur and Kolkata for recovery of dues.