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Banks declaring units as NPAs even before date of issue of notices: Amethi MSMEs

Updated: Apr 26, 2016 08:08:31am

Amethi, Apr 26 (KNN) The dying micro, small and medium enterprises (MSMEs) from the region that has been the battle ground of big leaders from Congress and BJP have been approaching all the parties regularly for help. But surprisingly, despite taking up the issue to Centre, State and RBI level, they have failed to receive any help from them.

The troubled MSMEs from Amethi last week met Rahul Gandhi and on Sunday tried to meet Union HRD Minister Smriti Irani.

The Indian Industries Association (IIA), in March, had written a letter to the Prime Minister highlighting their issue about the banks declaring units as NPAs retrospectively i. e. even before the date of issue of notices. In case of one Unit the date of Notice and Non-Performing Asset date is same.

“We are submitting to you the plight of MSME units located in industrially backward area in Uttar Pradesh as sample cases in this letter. From the perusal of the facts of these cases it appears that the concerned bankers are non-cooperative and are intentionally trying to close & sell the assets of the industries without providing them reasonable opportunity for rehabilitation,” IIA wrote in the letter.

Amethi District has about 150 Micro, Small & Medium Industries doing business with the assistance of Banks who have financed them. Presently about 15 units in Amethi District have received letters/notices from Banks intimating them about default in payment and out of which 10 Units had submitted their rehabilitation plan, the letter added.

In the letter, the association also highlighted some of the units were declared NPA even before the date mentioned in the notices sent to them by the banks.

One such case mentioned in the letter was of M/s Raj Enterprises where the unit had Rs 50 lakhs sanctioned in May 2013 from Bank of Baroda, Utelva, Jagdishpur.

“The notice was issued on 14.5.2015 calling upon to pay outstanding Rs. 38,68,719/- as of 31.3.2015 inclusive of interest within 60 days. Assets declared Non Performing since 31.3.2015 i.e. before the date of notice. Cause of default/sickness due to discontinuation of CC facility and issue of wrong Electricity bill,” mentioned the letter.

Another such case was with M/s I.V.S. Food Private Ltd. The unit had Rs 1, 12, 00000/- sanctioned in March 2013 from Punjab National Bank, Kathora, Jagdishpur and DGM SIDBI, Lucknow.

“Notice issued on 8.8.2015 calling upon to pay outstanding Rs. 1, 09, 48,774/- as of 31.10.2015 inclusive of interest within 60 days. Assets declared Non Performing since 12.7.2015 i.e. before the date of notice. PNB also issued Possession notice on 20.11.2015 intimating taking possession from said date. Rs. 1.20 Crore from SIDBI. SIDBI intimated vide letter dated 1.2.2016 classifying IVS Foods Pvt. Ltd. as willful defaulter asking the Unit to submit specific representation by 1st March 2016 which he has submitted. The cause of default/sickness is due to not getting required funds from Bank and not meeting the demand due to shortage of Machines,” highlighted the letter.

These were not the only two cases, there are many more such cases forcing for the closure of more than 50 units in the region.

The Divisional Commissioner sent a letter on 2.9.2015 to Joint Director Industries Faizabad advising him not to take action these Units Contrary to the rehabilitation policy and provide required facilities.

“The respective Banks have not only issued Notice of Recovery to them but also frozen the amount as Non-Performing Assets and in some cases taken possession on paper. In one case even the date of auction has been intimated as 15 th March, 2016,” IIA letter pointed.

“The harsh action of Banks to recover the loan outstanding and proceed with sale, without giving an opportunity to repay by having a plan in place, may not only result in closure of these Units but will make number of persons unemployed and retard development of this Area,” the letter added. (KNN Bureau)


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