Baghat bank case: Govt employee held for Rs 32.79 lakh loan default

The Solan police arrested Megh Ram Sharma, a resident of Chopal tehsil in Shimla, for defaulting on a Rs 32.79 lakh house loan taken from the Baghat Urban Cooperative Bank, Solan. Sharma, who works with the state education department, had availed the loan in 2017 but failed to repay a substantial portion despite repeated reminders.

Recovery proceedings were initiated before the collector-cum-assistant registrar (cooperative societies). However, Sharma ignored two court summons, leading to the issuance of arrest warrants on October 25. Acting on these warrants, a Solan police team arrested him from Nerwa and produced him before the concerned court on Friday.

According to bank’s Managing Director Rajkumar, Sharma deposited Rs 1 lakh in cash following his arrest. His Drawing and Disbursing Officer (DDO) stood surety, assuring that Sharma’s salary had been attached and that repayment would begin soon. Based on this assurance, the court ordered his release.

The collector’s court has issued 22 arrest warrants against loan defaulters to expedite recovery. So far, 10 defaulters have either surrendered or been arrested, while search operations continue for 12 others — 11 from Shimla and Sirmaur districts and one from Solan.

The bank, which is grappling with non-performing assets (NPAs) of Rs 137 crore, has recovered only Rs 2.45 crore in cash since October 8, when the Reserve Bank of India (RBI) imposed a Rs 10,000 withdrawal cap due to financial stress. Officials admit that most mortgaged properties are overvalued, limiting actual recoveries. They now hope to generate funds through the November 20 auction of 28 properties.

The loan disbursal facility of the bank was suspended in April 2021 after the RBI penalised it for financial irregularities. Despite a month-long recovery drive, NPAs declined only marginally to Rs 132.50 crore.