Baghat bank to auction 28 properties on November 20

Facing severe Reserve Bank of India (RBI) curbs, the Solan-based Baghat Urban Cooperative Bank will put to auction 28 properties on November 20 even as more than 80,000 customers eagerly await lifting of financial restrictions on withdrawal.

The bank has managed to secure cash recovery of barely Rs 2.01 crore since October 8 when the RBI imposed financial caps on the bank owing to various financial inadequacies.

While the Assistant Registrar, Cooperative Societies, issued 23 arrest warrants against defaulters, the bank management has been endeavouring to seize assets to recover its loans. In this context, a truck belonging to a borrower Tek Chand facing a default of Rs 40 lakh was seized last evening, informed bank’s managing director Rajkumar.

The management hopes to recover some amount through its auction though there is bleak hope of recovering the entire amount.

As many as 28 assets comprising plots, built-up residential and commercial properties in Solan city, Palampur, Shimla, Darlaghat and villages in Solan, Kasauli, Rajgarh, Nalagarh have been listed in the auction.

Those interested in availing these assets have been directed to deposit the reserve money by November 19 to be eligible to participate in the next day’s e-auction.

While the bank hopes to earn a few crores from these properties, it remains to be seen if a sizeable amount is recovered as that alone will lift financial sanctions.

The loaning facility to the bank was put on hold in April 2021 after the apex bank imposed a penalty owing to financial inadequacies. The recovery was abysmally slow and the NPA was marginally reduced to Rs 132.50 crore from Rs 137 crore in the month-long recovery exercise.

The bank’s gross NPA ratio stood at 47.10, which points towards worsening financial status, eroding consumer confidence. Its net NPA was 12.91 per cent. An ideal NPA ratio is close to zero and a Gross NPA below 2 per cent is considered manageable and reflects good credit management.