• Charges By Bank

As a branch manager I have sanctioned 3 term loans under joint liability group scheme for Dairy.

All 3 accounts came under quick mortality and became NPA.

Each group had 4 members who all were sanctioned and disbursed one unit of Buffalo of rs 50000 each.
Charges laid by bank on me are that you have sanctioned and disbursed entire 2 lacs loan amount at once. While it she be in 2 parts. In my reply I said as loan amount was 50000 per capita and total 50k×4= 2 lacs was project cost. And there was no single party in loan account. Four different person was part of group so I disbursed 50000 at once to each member. Now kindly guide further in this matter. As they have not accepted my reply and are proceeding for departmental enquiry.
Asked 5 years ago in Labour

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11 Answers

Dear Sir, kindly note that in view of the facts mentioned above by you, it is important to see the show cause notice and your reply you have given in the departmental enquiry. 

While discussing loan the loan papers must talk about the manner and amount granted during the loan. 

Mayank Sapre
Advocate, New Delhi
256 Answers

5.0 on 5.0

Sir you need to refer the police and rules of the bank for disbursement of loans in such cases. If no where in bank rules and internal circular you are barred from disbursing the loan together then departmental enquiry is not maintainable.

Secondly if due care and procedure prescribed under rules were followed by you then also the enquiry shall not be maintainable 

Further was loan given to a group or individual in a group scheme?? And the details of the scheme??

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

1. Your reply to the show cause was very much justified and legally tenanble.

2. However it is to be found out whether a single loan application was filed if it was filed in 4 seaprate ocassions.

3. If it was single application then you have a good case and there is nothing to be worried about the DP.

4. Do not reply any charges unless you are served with the Memo of Charges in writing. 

Devajyoti Barman
Advocate, Kolkata
22779 Answers
484 Consultations

5.0 on 5.0

is there any regulations that entire loan amount should not be sanctioned at one go ?

 

2) if departmental inquiry is being conducted against you then you   Should contest the departmental proceedings to prove your innocence 

 

3) you have not taken any kickbacks for sanction of loan 

 

4) you are not be blamed if account has become NPA 

Ajay Sethi
Advocate, Mumbai
94520 Answers
7485 Consultations

5.0 on 5.0

  1. As per the information mentioned in the present query, makes it clear that you have done which is as per law.
  2. Thouth the loan amount is 2 lacs, but sanctioned for 50000 each with respect to a unit of buffalo.
  3. There is no question of fault at your end.
  4. You may have to file a Writ of Certiorari under article 226 of our Constitution of India before the High Court for setting aside the order for departmental inquiry till the disposal of the Writ.

Sanjay Baniwal
Advocate, South Delhi
5473 Answers
13 Consultations

5.0 on 5.0

See the criteria created by RBI for sanctioning loans.

2.3.7.3 Criteria for Financing

Banks/FIs are free to finance technically feasible, financially viable and bankable projects undertaken by both public sector and private sector undertakings subject to the following conditions:

(i) The amount sanctioned should be within the overall ceiling of the prudential exposure norms prescribed by RBI for infrastructure financing.

(ii) Banks/ FIs should have the requisite expertise for appraising technical feasibility, financial viability and bankability of projects, with particular reference to the risk analysis and sensitivity analysis.

(iii) In respect of projects undertaken by public sector units, term loans may be sanctioned only for corporate entities (i.e. public sector undertakings registered under Companies Act or a Corporation established under the relevant statute). Further, such term loans should not be in lieu of or to substitute budgetary resources envisaged for the project. The term loan could supplement the budgetary resources if such supplementing was contemplated in the project design. While such public sector units may include Special Purpose Vehicles (SPVs) registered under the Companies Act set up for financing infrastructure projects, it should be ensured by banks and financial institutions that these loans/investments are not used for financing the budget of the State Governments. Whether such financing is done by way of extending loans or investing in bonds, banks and financial institutions should undertake due diligence on the viability and bankability of such projects to ensure that revenue stream from the project is sufficient to take care of the debt servicing obligations and that the repayment/servicing of debt is not out of budgetary resources. Further, in the case of financing SPVs, banks and financial institutions should ensure that the funding proposals are for specific monitorable projects. It has been observed that some banks have extended financial assistance to State PSUs which is not in accordance with the above norms. Banks/FIs are, therefore, advised to follow the above instructions scrupulously, even while making investment in bonds of sick State PSUs as part of the rehabilitation effort.

(iv) Banks may also lend to SPVs in the private sector, registered under the Companies Act for directly undertaking infrastructure projects which are financially viable and not for acting as mere financial intermediaries. Banks may ensure that the bankruptcy or financial difficulties of the parent/ sponsor should not affect the financial health of the SPV.

 

Ganesh Kadam
Advocate, Pune
12910 Answers
253 Consultations

4.9 on 5.0

The minute they reject the explanation submitted by you as 'non-satisfactory' and proceed ahead with a departmental inquiry against you, by way of issuing you a chargesheet, you will have the option of assailing the chargesheet in a comptent court of law. At this stage, any legal action is pre-mature. Wait till the stage they take a decision on the explanation submitted by you. This enitre episode will be governed by the service rules of your bank.  

Vibhanshu Srivastava
Advocate, Lucknow
9588 Answers
303 Consultations

5.0 on 5.0

Your reply should happen in such a way that the cost of one buffalo was rupees 50000 and in case the amount was not paid in one installment the sole purpose of the loan should not have been achieved.

This was the reason that all the amount if you together so that the applicant can purchase the buffalo and start their project.

Vimlesh Prasad Mishra
Advocate, Lucknow
6852 Answers
23 Consultations

4.9 on 5.0

You can send the reply by post and if they don't take it on record then the inquiry will be illegal

Prashant Nayak
Advocate, Mumbai
31807 Answers
175 Consultations

4.1 on 5.0

If the reply furnished by you was not satisfactory, then the authorities may order for departmental inquiry.

You need not worry, you can give the same reply by citing the bank policy for grant of loan to individuals and make your grounds to defend yourself.

Let the inquiry committee take any decision, which can be challenged in the labour tribunal subsequently, if aggrieved.

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

Hello,

 

Accepting a reply or not is upon the,. if they go ahead and conduct the disciplinary inquiry then you may challenge the validity of the same before the court on the ground that the same has been initiated without considering the reply in an arbitrary manner. 

 

Regards 

Anilesh Tewari
Advocate, New Delhi
18077 Answers
377 Consultations

5.0 on 5.0

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