Thursday, February 4, 2010

Banks prefer lok adalats for the settlement of bad loans

In Chennai banks are preferring to take their cases to lok adalat rather than going to court which is time-consuming process of fighting civil cases. The banks are lining up at the Tamil Nadu State Legal Services Authority (TNSLSA) for the recovery of their bad personal loans and credit card dues.

On January 6, the authority conducted an exclusive mega lok adalat for the Central Bank of India and on a single day the bank was able to dispose 226 cases and recover a whopping Rs 11.2 crore. For that day total of 1,430 cases were listed for hearing.

However, the State Bank of India will be holding its own special lok adalat at the TNSLSA premises on February 3. While the ICICI Bank a private sector bank will be holding its own special adalat on February 5.

T Mathivanan, member-secretary of the TNSLSA, said, “Encouraged by the hugely successful adalat of the Central Bank earlier this month, the SBI has decided to bring 1,693 pre-litigation cases before the special adalat. Six adalat benches will be created for the purpose.”

On the other hand the SBI deputy general manager, V Srinivasan said, “Together, these cases involve a claim amount of Rs 20.62 crore, and we hope that our customers as well as the bank itself would benefit from the exercise.” He added, the cases related to personal loans, home loans and education loans will be taken up.

Lok adalats are the most popular of all alternative disputes redressal (ADR) mechanisms have proved to be very effective in settling the disputes as the settlements are done after mutual consultation and consent. The settlement reached is final, and neither of the parties can appeal against the lok adalat ruling. There is no court fee for the exercise.

Although the Legal Services Authority Act had provisions to hear pre-litigation cases, Mathivanan pointed out it will help in reducing the burden on judicial forums, and in case there is any non-settlement in some disputes they would be taken up as civil suits in courts.

Regarding the nature of cases listed for hearing on Wednesday, Srinivasan informed they will take up personal loan cases of up to Rs 1.25 lakh and small business/trade loans up to Rs 1.5 lakh. He said personal loans alone have Rs 19.6 crore as claim amount. He added, “We have participated in several lok adalats in the past too. They were beneficial both to the borrowers and the bank.”

Last year up to the month of November alone, around 42,761 cases were resolved by the TNSLSA and settled an estimated claim amount of Rs 172.8 crore.

8 comments:

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pramod said...

bank's should recah the adalat and recover the tax peyer's money from the defaulters and npa accounts. make hay before some political solgan in the forthcoming elections persuade defaulters and NPA account holders not to pay and is paid through govt. cogffers.

Ramesh said...

i have loan with me and i want them to settle at one time

Ramesh said...

to solve my problem mail me on rcaggarwal10@gmail.com

Rakesh said...
This comment has been removed by the author.
Rakesh said...

Mortgage loan was issued on our property to some other person, property does not belongs to him, property is ours and in our name. That person is no more, We did not received any amount, still we are ready to settle but bank staff is not cooperating, what to do in this case. Please email rakesh.gerra@yahoo.com

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Birendra Rai said...

I have taken home loan and paid 14 EMI. Due to my home captured forcibly just after one month of my registry. I stopped payment after 14 EMI. Bank has filed civil suit in 2010 against me for recovery. Meanwhile I approached many times to settle down the matter by one time payment and given two proposals.They were agreed verbally initially, but no reply given from their side. They have not declared my home loan A/c as NPA also in 90 months of not paying the EMI. I approached to Court and submitted application to pay the loan. Court sent the file to Lok Adalat. We are found difference in rate of interest, and settlement fails. Matter comes before court, all the hearing completed and I was waiting for decision. But I donot know why and how again matter has been sent to National Lok Adalat. please suggest and help me. My mail Id is birendrarai2002@gmail.com