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Bankers resort to 'Gandhigiri' to recover dues from wilful defaulters

By Somasroy Chakraborty
March 21, 2015 09:58 IST
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United Bank of India and Andhra Bank employees start organising silent protests outside houses and work places of defaulters.

Bankers are resorting to 'Gandhigiri' – made famous by Rajkumar Hirani directed Bollywood movie Lage Raho Munna Bhai – to recover loans from wilful defaulters. 

Employee unions of two state-run lenders – United Bank of India (UBI) and Andhra Bank – have started organising silent demonstration in front of house and work place of defaulters.

The move is aimed to create social pressure on borrowers who are not repaying their loans in time and will complement the banks' traditional loan recovery measures. 

"The workmen unions have come forward to extend support to the recovery drive of our bank. We are wearing placards, which read 'please pay our dues', and standing in front of the residence and work place of wilful defaulters. We are not engaging in any conversation with the defaulters and making silent demonstrations," Saumitra Talapatra, general secretary of UBI Employees Association, which is affiliated to All India Bank Employees Association (AIBEA), told Business Standard

The members of the employee union of UBI are taking personal leave on the day of the demonstration.

"This is an initiative of the union to show solidarity with the management and staff in their fight against non-performing assets (NPAs). A similar movement has been initiated in Andhra Bank as well. We are hoping that soon other banks will also join," Talapatra said. 

He clarified that members of UBI's employee unions are making demonstrations only in cases where the borrower has been classified as a wilful defaulter.

According to the Reserve Bank of India's (RBI) guidelines, a borrower who does not repay his dues can be classified as wilful defaulter if (a) he has the capacity to honour his obligations, (b) siphoned-off the funds, (c) did not use the money for the specific purpose for which the loan was availed, and (d) disposed-off the fixed assets shown as security against the loan without the knowledge of the lender. 

Talapatra said UBI's employee unions will also organise demonstrations in front of offices of corporate borrowers that are not repaying loans willfully.

"We will demonstrate against both individual and corporate borrowers who are not repaying the bank's loan. We are planning the movement across the country. We believe that many will start repaying their dues when they find their reputation is at stake," he said. 

UBI closed the third quarter of this financial year with Rs 7,809 crore (Rs 78.09 billion) of gross NPAs and Rs 5,240 crore (Rs 52.40 billion) of net NPAs. The bank's gross NPA ratio – at 12.03 per cent at the end of December, 2014 – is one of the highest in the banking industry.

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Somasroy Chakraborty in Kolkata
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