Borrower pays Baghat cooperative bank Rs 10L after arrest

The Baghat Urban Cooperative Bank has made headway in recovering its pending dues after a major loan defaulter deposited Rs 10 lakh and pledged to pay another Rs 50 lakh within 30 days. The recovery effort gained momentum following his arrest by the Solan police on an arrest warrant issued by the Assistant Registrar, Cooperative Societies (ARCS).

The borrower, who had taken a loan of Rs 2.10 crore in 2016, was declared a non-performing asset (NPA) after defaulting on repayments within months. He was released after assuring the ARCS that he would clear the outstanding amount at the earliest, said Rajkumar, the bank’s Managing Director.

Rajkumar added that more recoveries were expected soon, with 11 additional arrest warrants already issued against other defaulters. “As many as 499 individuals have availed Rs 290 crore in loans, of which Rs 138 crore has turned into NPAs. Fifty major borrowers alone owe Rs 72 crore,” he said, adding that the bank is now prioritising action against these top defaulters to improve its financial standing.

Currently, the bank’s gross NPA ratio stands alarmingly high at 47.1%, with net NPAs at 12.91%, reflecting severe stress and eroding depositor confidence. Ideally, a gross NPA below 2% is considered healthy. The management is banking on strict recovery measures to stabilise its finances and restore credibility.