Latest news with #SARFAESIAct
Time of India
2 days ago
- Business
- Time of India
Harassment by banks pushing many to suicide: MSME Forum to CM
Ludhiana: In a letter to chief minister Bhagwant Mann, the World MSME Forum has expressed grave concern about the increasing number of suicides among businesspersons. The forum has blamed harassment by banks and financial institutions for such cases. Suicide by an elderly couple, who took the extreme step in the wake of threats by recovery agents of a private bank, pushed the issue to the forefront. In a letter dated June 27, World MSME Forum president Badish Jindal said that Jasvir Singh and his wife Kuldeep Kaur committed suicide after being harassed over a missed loan instalment. The couple left a suicide note accusing a private bank of deploying goons to intimidate them, which ultimately led to their decision. Jindal stated, "This is not the first case of such a tragedy in Punjab. Several business owners have previously died by suicide under similar pressure from banks and financial institutions. Despite the legal provisions under the SARFAESI Act, banks continue to employ musclemen to recover dues, often threatening or publicly humiliating borrowers." The Forum pointed out that despite courts prohibiting banks from using goons for loan recovery, the practice remained widespread. "Private and even a few govt banks rely on illegal recovery methods to intimidate borrowers," Jindal added. As per statistics cited in the letter, 6,398 businesspersons committed suicide across the country in 2021 due to loan repayment issues, a number that rose to 7,008 in 2022. While the National Crime Records Bureau (NCRB) has not released data for 2023, the Forum estimates that such suicides continue to increase. "The trend of businesspersons ending their lives due to harassment from financial institutions is extremely disturbing," Jindal remarked. The World MSME Forum has called on the Punjab govt to take immediate action against banks employing unauthorised recovery agents. "Such goondaism should not be tolerated under any circumstances," the letter stressed, advocating blacklisting of institutions involved in such activities and a review of their licenses. Jindal connected the issue with the broader law and order challenges in Punjab, stating, "The Punjab government has taken commendable steps to eliminate gangsters in the state. These recovery agents are also part of this gangster system. They operate as an extension of the gangster ecosystem. The state must act swiftly to dismantle this system as well."
Time of India
4 days ago
- Business
- Time of India
Chikkamagaluru planter seeks euthanasia after farmland auction for loan default
Chikkamagaluru: A coffee planter from Chikkamagaluru district, struggling with debt, sought permission for euthanasia after his bank auctioned his farmland under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), leaving him without means of income. Dr Vijaya and his wife HN Parvathi presented their petition to the President of India through tahsildar, Rajshekhar. Vijaya borrowed Rs 25.9 lakh against his four acres of coffee plantation located at survey number 40/2 in Kelluru village. In addition, his wife borrowed a Rs 6 lakh agricultural loan against her 3.39 acres under survey number 40/1. However, they both failed to repay the loan due to repeated crop loss, price drop, the Covid-19 pandemic, and bad weather. Apart from this, wild animals damaged the coffee plantation put the couple into hardship to repay the loan amount. "In 2024, we repaid Rs 5.3 lakh, and the bank had assured us time to repay the remaining dues but they auctioned our property," Vijaya said. He stated, "Property worth nearly Rs 3 crore was sold online for just Rs 89.5 lakh. We are now left with no means to survive." The Raitha Hitha Rakshana Vedike condemned the banks for the inhumane act. BK Lakshman Kumar, president of the Vedike, said for the first time in the history of the district, a farmer has pleaded for mercy killing due to distress caused by SARFAESI Act. He there are 2,700 farmers under the SARFAESI bracket in the district, of which 400 have repaid loans. However, 2,300 farmers are at risk of losing their lands. He urged the authorities concerned to protect the welfare of farmers.
Time of India
6 days ago
- Automotive
- Time of India
What auto loan borrowers must know before it's too late?
The demand for auto loans has skyrocketed in the past few years due to increased aspiration for vehicle ownership, especially in the smaller towns. According to the CRISIL report, vehicle financing in India is expected to touch INR 9.4 lakh crore through FY26 fiscal at a CAGR of 15-16per cent for this fiscal and next. Additionally, data collected from a report states that while 60per cent of metropolitan car buyers avail of financing, around 75per cent consumers in smaller towns opt for car financing. This is how credit is increasingly being used to meet aspirations for mobility. However, as auto financing is booming, loan defaults are also adding up. TransUnion CIBIL has reported that delinquency rates for auto loan s on a 90+ days past due (DPD) basis stood at 0.6per cent in June 2024, presenting a very marginal improvement, indicating prevailing stress in the sector. Though the volume of auto loan origination has reduced by 3per cent year-on-year for the quarter ending September 2024, the amount disbursed saw a moderate growth of only 1per cent . This suggests that the borrowers are availing themselves of fewer loans but for bigger amounts, which may be risky. The real cost of defaulting on auto loans Rising auto loan defaults result in various implications. For the borrowers, defaulting can mean a chain of potential challenges, including poor credit scores, expensive borrowing, and court cases. The borrowers must be aware of such situations regarding their rights. In India, defaulting on a loan is not a criminal offence unless fraud is involved. The borrowers should be informed well in advance regarding the repossession of any asset. Under the SARFAESI Act , the Reserve Bank of India requires that lenders provide a 60-day notice to allow borrowers to correct their dues. Moreover, fair valuation of the repossessed asset and any surplus proceeds from its sale shall also go back to the borrower. Reduce your loan burden with these smart steps While understanding these rights is vital to prevent any default in the first place, proactive financial management should be adopted. Here are some proactive approaches that a borrower may consider: Opt for a larger down payment A higher down payment reduces the loan amount, resulting in lower EMIs and total interest payments. For instance, if the cost of your vehicle is ₹10 lakh, and you are ready to pay half of the price in advance, you require taking a loan of just ₹5 lakh. That, in the end, puts less pressure on your wallet. Choose a longer loan tenure When loan tenure is extended, the resulting monthly payments become easier to manage. However, borrowers must ensure to weigh it against the total interest paid during the lifetime of the loan. An increased tenure will probably lead to larger overall interest amounts, so checking your financial capacity before proceeding is advisable. Make additional EMI payments If possible, try paying more than the exact amount mentioned in the EMI terms. It reduces the loan tenure and interest paid overall. While seemingly minor, such additions over the years can save you a considerable amount. Roundup your payments Another effective strategy is to round up your monthly payments. For instance, if your payment is Rs 18,000, try paying ₹20,000 instead. The extra amount will go directly towards reducing the principal, helping you pay off the loan more quickly. Look for opportunities to make extra payments If you receive unexpected financial windfalls, like tax refunds or bonuses, consider allocating a portion of those funds towards making lump sum payments on your car loan. This can help lower the principal balance and reduce the total interest you'll pay in the long run. Increased defaults in auto loans indicate changing borrower behaviour and stress in the marketplace. For individuals, financial literacy and preparedness make the difference between default and a repayment plan. As accessibility for auto financing widens, responsibility must be coupled with aspiration to create seamless ownership journeys for borrowers.
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Business Standard
29-05-2025
- Business
- Business Standard
McLeod Russel in discussion with NARCL for composite debt resolution
McLeod Russel India has submitted an initial proposal to the National Asset Reconstruction Company Limited (NARCL) for resolution of its debt. In March this year, most lenders—except IndusInd Bank—assigned their loan accounts in India's largest bulk tea producer to NARCL. In its results disclosure, McLeod stated that borrowings from banks aggregating to Rs 1,033.03 crore, representing the principal amount, had been assigned to NARCL. This was done under an Assignment Agreement dated 12 March 2025, executed under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). According to McLeod sources, the company is now seeking a composite resolution of its total debt and has initiated engagement with NARCL. In its notes to results, McLeod mentioned that management is confident that a resolution will be reached regarding borrowings from asset reconstruction companies (ARCs) and banks, aggregating to Rs 1,461.07 crore. The company expects to arrive at a sustainable repayment amount, including associated costs, along with an agreed repayment timeline in due course. In addition to NARCL, McLeod will also have to engage with IndusInd Bank and JC Flowers ARC. While realisation from tea sales had improved to some extent, the company suffered crop losses due to adverse weather conditions, impacting overall operations and performance. The company further noted that inter-corporate deposits (ICDs) extended to various promoter group entities and others in earlier years, along with accrued interest, remain outstanding as of the reporting date. In the January–March quarter (Q4FY25), McLeod reported a net loss of Rs 174.41 crore, down from Rs 218.42 crore in the corresponding quarter of the previous year. Revenue from operations stood at Rs 165.47 crore in Q4FY25, compared to Rs 194.95 crore a year earlier. For the full year FY25, revenue was Rs 1,185.41 crore, compared to Rs 1,135.89 crore in FY24. The net loss for FY25 stood at Rs 197.87 crore, down from Rs 311.59 crore in FY24.
Mint
22-05-2025
- Business
- Mint
4 serious consequences of missing your home loan EMI payments
In the nation's ever evolving economic landscape, consistent and on time repayment of home loan Equated Monthly Instalment (EMI) holds immense value. It is imperative to make sure that the repayment of not only home loans but any other kind of loan is made on time and in seamless fashion to avoid any late payment fees or charges. Due to the same, missing out on even a single payment or EMI can result in serious financial complications and legal ramifications. Rishi Anand, MD & CEO, Aadhar Housing Finance Ltd says, 'Missing EMIs can damage your credit score, increase debt burden with late fees, and lead to loan foreclosure or legal action. As, the interest continues to accumulate on defaulted EMIs, further increasing your outstanding balance and putting greater pressure on your finances. To avoid this, set up automatic payments, prioritise timely repayments, and communicate with your lender if facing financial difficulties." Keeping the above points in mind, here are four critical reasons why staying current on your home loan EMIs is essential: Your credit score is simply a reflection of your financial prosperity i.e., how reliable you are in making repayments on time. That is why even a single missed EMI can result in causing a substantial drop in your credit score influencing your future savings and borrowing in a negative way. A delay of just one day can result in reducing your credit score by up to 25 to 30 points. A month-long delay may result in an even more serious dent, declining your score by 75 to 100 points. The negative remarks of default or missed payment can stick on your report for up to 7 years. Missing EMIs can result in financial penalties, legal difficulties etc. These additional costs can strain your financial health further and result in emotional and psychological problems. Late payment fees typically range from 1% to 2% of the EMI amount. Penal interest rates can be as high as 2% to 4% per month on the overdue amount. These charges accumulate quickly, increasing the overall repayment burden. Regular non payment can result in several legal difficulties including loss of your property along with other serious economic consequences: If you miss three consecutive EMIs then your loan account might be classified as a Non-Performing Asset (NPA). This will make future personal loans and premium credit cards nearly impossible to secure. Banks and financial institutions can initiate recovery proceedings against defaulters. These proceedings are initiated under the SARFAESI Act and have the possibility of property auctioning to meet loan shortfalls. Further legal actions, seizure of assets etc., can damage your financial standing and creditworthiness to an even larger extent. The consequences of missed EMIs extend beyond immediate financial penalties impacting your financial future and economic prosperity. A 'settled' status on your loan indicates partial repayment. It can lower your credit score by 50 to 100 points. Such negative information can stick on your credit report for about 7 years. Tarnished credit history can make it tough for you to secure new loans or credit cards. Hence, missing your home loan EMIs can significantly damage your credit profile. It can negatively influence your credit score, invite penalties and even result in serious legal consequences such as property and asset auctions along with seizure of funds for meeting repayment short falls. These developments generally take place on court orders still, it is always prudent for borrowers to avoid going in that direction as it creates financial instability, legal difficulties and complicates an individual's financial prosperity. Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Please consult a professional before making loan-related decisions.
