Convicting the then manager of the State Bank of Bikaner and Jaipur’s Rajaji Salai Branch here for advancing a huge loan accepting forged papers, the judge of the Special Court for CBI Cases here on Thursday expressed concern over the yardsticks adopted by nationalised banks in dealing with different types of loan defaulters.
The XIth Additional Special Judge for CBI cases K Venkatasamy disapproved of the harassment allegedly meted while recovering education loans from students while being lenient in recovery of loans advanced to corporate borrowers.
Referring to the recent decision of the State Bank of India (SBI) to sell a large number of its ‘bad’ education loans to the Reliance Asset Reconstruction Company for a consideration of just 45 per cent of the principal, the judge said had the bank offered to the student defaulters the option of repaying 45 per cent of the dues for closure of loan accounts, instances of students committing suicides could have been avoided.
Mr. Venkatasamy was delivering the judgment in a loan scam involving the State Bank of Bikaner and Jaipur, Rajaji Salai Branch here. Holding the then bank manager Bhushan Kumar guilty, he sentenced the accused to four years imprisonment and imposed a penalty of Rs 1 crore. The case was investigated by the CBI’s Economic Offences Wing.
The prosecution case is that Kumar sanctioned loans to Shridi Sai Polymers Private Limited represented by its proprietor A.S. Suresh (since deceased), his wife D. Sangeetha and others knowing well that the documents they produced were forged. The beneficiaries defaulted repayment of the loan resulting in a loss of Rs. 2.46 crore to the bank.
Since Suresh committed suicide during the course of investigation, the charges against him abated. Sangeetha was sentenced to three years imprisonment and imposed a fine of Rs. 30 lakh. Three other accused in the case were convicted and sentenced to various terms.
Referring to newspaper reports on how a student committed suicide in Madurai after loan recovery agents of Reliance Asset Reconstruction Company pressured his family to repay education loan, the judge said nationalised banks were trying to facilitate the corporate sector even while implementing welfare schemes for the poor.
Mr. Venkatasamy said education loans were imperative for poor students to pursue higher education amidst escalating costs.
Instead of adopting a humanitarian approach while dealing with repayment of education loans, the SBI had chosen to sell the ‘bad’ loans to Reliance Asset Reconstruction Company that would make a profit of 55 per cent of the loan component.
While applicants of ordinary loans were made run from pillar to post, nationalised banks were offering huge loans and other facilities to corporate borrowers even without adequate documents.
When such borrowers failed to repay, the loan accounts were simply brought under the non-performing asset category and no firm action taken to recover the money, the judge said.
Appreciation for CM
The judge had a word of appreciation for the Tamil Nadu Chief Minister for making an announcement that the government would bear the entire cost of education of 17 poor students who wanted to pursue courses in engineering and medicine.
Disapproves of harassment of students while being lenient to corporate borrowers
