SARFAESI Act: Banks to take over mortgaged properties of defaulters in 60 days

SRINAGAR — At a time when entrepreneurs are seeking more concessions to run their ventures who have witnessed slowdown since August 5 last year, Government has formally written to all District Magistrates to assist banks and financial institutions to take physical possession of properties mortgaged of loan defaulters.

A communication from the Finance Department No. FD/BKG/12/J/2020; Dated: December 3, 2020, states that “in case of defaults where time limit of 60 days has already lapsed, the same may be cleared within a week positively.”

The Finance Department communication reads: “Department of Financial Services, Ministry of Finance, Government of India has intimated that applications filed under Section 14 of the above Act by the banks and financial institutions with district magistrates often remain pending with them for more than 60 days.”

“Accordingly, I am directed to request all DAs to coordinate with all relevant banks/FIs in recovering dues from defaulters and clear all the pending applications U/S 14 of the SARFAESI Act well within the prescribed period of 60 days,” the communication further says.

“All pending applications under Section 14 of the above Act filed by various banks and financial institutions where time limit of 60 days have already lapsed may be cleared within a week positively and a report in this behalf be shared with the Finance Department, so that the same is forwarded to the Department of Financial Services, Ministry of Finance, Government of India,” the communication reads.

Federation Chamber of Industries, Kashmir (FCIK) has called the move discouraging for entrepreneurs and would erode faith on Government policies and commitments.

He said, “This action is bound to erode the left out faith and confidence of the business community on government policies and commitments as it has come only a few months after unveiling of “Business Revival Package” by the Lt. Governor that among other things, also provided for relief to stressful and non-performing accounts in the form of one time settlement and restructuring.”

“Whereas GoI has come up with slew of measures to support the enterprises affected by COVID-19 lockdown, the government here seems to remain insensitive to the sufferings of enterprises over three decades, particularly after August last year,” he added.

“This action is set to derail the revival of existing businesses and promotion of prospective entrepreneurship by engaging educated youth, if such a programme was seriously being pursued by the government,” he said.