Assistance of the investigating agencies in obtaining a loan under stress

Mumbai, Ta. January 21, 2020, Tuesday

Banks are increasingly seeking the help of investigating institutions to get an end to the end-use of loans financed by companies under three stressors, according to banking sources.

In the last three months, lenders have employed several agencies to get the financing of loans from various companies. Agencies are being appointed for loan accounts of more than Rs 1 crore, banking sources said.

Currently, agencies are being restrained only to receive money under stressed loans.

Going forward, there are plans to seek the help of surveillance agencies to monitor the accounts of each major creditor, the banker said. Even if such an account pays for the money on time.

In some cases bank loan money does not appear to be used for the purpose for which it was taken. In view of this fact, it is no longer appropriate to sit on the trust of large creditors.

Up to five agencies have been included in the panel to monitor stressed loans. The latest report of the Reserve Bank reported that there were six cases of malpractice covering Rs 5 crore in fiscal year 1.

Compared to fiscal year 1, the value has increased by 2 percent in terms of value and 5 percent in terms of volume. Of these, 5% was malpracticed in loans which amounted to more than Rs 1 crore.

In view of this fact, the Reserve Bank has made it compulsory for banks to monitor loans.