Loan defaulter held as Baghat coop bank battles NPA crisis

The Kandaghat police have arrested Ravinder Nath (71), a resident of Bisha village, for defaulting on a loan of Rs 3.49 crore taken from the Baghat Urban Cooperative Bank, Solan. The arrest followed non-bailable warrants issued by the Collector-cum-Assistant Registrar, Cooperative Societies, Solan, on October 17 under Section 75(A) of the Land Revenue Act 195(A) after the bank filed a complaint against him for loan default.

According to the bank, Nath had failed to repay the loan within the stipulated period and was declared a defaulter with an outstanding liability of Rs 3,49,26,957. Bank Managing Director Rajkumar confirmed the arrest, adding that Nath was released after depositing a token amount of Rs 1 lakh and assuring repayment of one loan account within 30 days and the other within 90 days.

The arrest comes at a time when the Baghat Urban Cooperative Bank is reeling under severe RBI-imposed restrictions, including a Rs 10,000 withdrawal cap per customer since October 6. The central bank’s curbs followed a sharp deterioration in the bank’s financial health, with non-performing assets (NPAs) of Rs 137 crore and a Gross NPA ratio of 47.1%, far above the acceptable limit of 2%. The Net NPA stood at 12.91%, indicating deep financial stress and declining depositor confidence.

Of the 499 borrowers who availed loans worth Rs 290 crore, around Rs 138 crore has turned non-performing. Fifty individuals alone owe the bank Rs 72 crore, and management has now decided to target these top defaulters to recover substantial dues.

The bank is also pursuing Rs 42 crore stuck in arbitration under the SARFAESI Act and has sought RBI approval to execute pending property auctions worth Rs 2 crore. A crucial board meeting scheduled for tomorrow is expected to chalk out measures to steer the 10-branch bank, which serves nearly 80,000 customers, out of its mounting financial crisis.