The Hindu : Tamil Nadu / Tiruchi News : Lok adalats help banks to recover loans in a big way

Online edition of India's National Newspaper
Wednesday, May 11, 2005

Tamil Nadu

Tamil Nadu - Tiruchi

Lok adalats help banks to recover loans in a big way

Staff Reporter

District Legal Services Authority assists The concept has been used by banks in association with District Legal Services Authority for branches in city and Taluk Legal Services Committees for branches in rural areas.

TIRUCHI: Lok adalats have helped nationalised banks in Tiruchi region to recover loans in a significant way thereby increasing their operating profit.

Over the past couple of years, Indian Overseas Bank, Indian Bank, and State Bank of India have adopted this method to settle 4,151 cases resulting in realisation of Rs.7.97 crores.

The concept has been used by banks in association with District Legal Services Authority for branches in city and Taluk Legal Services Committees for branches in rural areas.

So far, the IOB has organised 35, the SBI 14 and the IB eight adalats.

A total of 12,717 summons have been issued by the IOB, 3,867 by the SBI and 2,058 by the Indian Bank. The overdue sums stood at Rs.35.05 crores, Rs. 7.43 crores and Rs. 4 crores respectively.

The `adalats' have been crucial in settling as many as 2,491 cases to the tune of Rs.4.29 crores for the IOB, 1,046 cases to the tune of Rs. 2.74 crores for the SBI and 614 cases to the tune of Rs. 84 lakhs for the Indian Bank.

Encouraged by the success rate of recovery, many bank branches have been insisting on frequent conduct of lok adalats.

In fact, all branches have been covered more than once so far.

No rigid or uniform norm is applied to fix repayment schedule.

"Factors such as defaulters' poor economic background or an unforeseen loss in business are dealt with a compassionate outlook," says a bank official.

The branch managers have been creating awareness among borrowers through interpersonal communication, says the Law Officer, IOB, N. Pazhanivelu.

The Law Officer, Indian Bank, Tiruchi, T. Krishnan, points out that lok adalats were helpful in recovery of overdues through rural branches. The Tiruchi Zonal office of the SBI stood first in recovery through lok adalats in the Chennai Circle, says the Deputy Manager (law), M. Manoharan.

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