The Cooperative Bank Secretaries Centre has raised objections to Chief Minister Pinarayi Vijayan’s statement that people’s houses should not be seized as collateral for loans. It said that the Chief Minister’s statement would send a wrong message to society.
In a memorandum submitted to the Chief Minister, Cooperative Bank Secretaries Centre State president Haneefa Perincheeri and secretary N. Bhagyanath demanded that he withdraw his statement.
The Chief Minister, during a speech in the Assembly, had indicated that he would direct the cooperative banks in the State not to attach houses mortgaged for loans.
Cooperative banks operating under the Reserve Bank of India (RBI) regulations proceed with property seizure as per the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act of 2002.
However, the SARFAESI Act and the Revenue Recovery Act do not apply to service banks and primary cooperative societies, which function under the registrar as per the cooperative law. In cooperative law, the sale of properties is conducted by sale officers through arbitration for loan recovery, said Mr. Perincheeri.
He said people taking loans from cooperative banks in the State were pledging houses in more than five cents, whereas commercial and public sector banks in the State were denying loans for them for such property. When public sector banks offer loans on the basis of Credit Information Bureau of India Limited (CIBIL) score, cooperative banks hardly care for the CIBIL score.
“We are not against exempting the poor defaulters from property recovery. But the Chief Minister’s statement that property recovery is not the State government’s policy will have far-reaching impact. Those who availed loans by pledging property of less value may rethink about repaying. It is giving a negative message to the people,” said Mr. Perincheeri.
Published - February 18, 2025 08:02 pm IST
