State Bank of Travancore union against private company given charge of loan recovery

KOCHI: The State Bank of Travancore Employees Union has opposed the decision of the bank management to entrust educational loan recovery to Reliance Asset Reconstruction Company.

The decision of the bank is against the very principle of social objectives enshrined in the idea of educational loans, KS Krishna General Secretary of Union told DC on Friday.

“If the aim is to recover the outstanding dues the entire loan amount should have been recovered. But, the bank has forfeited 50 per cent of the outstanding and then the sold the rest to the Reliance ARC”, he said.

SBT is having 8,500 non-performing asset under the educational loan category totaling Rs 185 cr in Kerala. According to the agreement with Reliance ARC they need to pay the bank only Rs 63 cr while the ARC is free to recover the total outstanding amount.

Initially Reliance ARC needed to pay only RS 9.5 cr to the SBT and the remaining Rs 53.5 cr will be paid as security receipt with 15 year period.

Instead of engaging a private agency the bank should have a taken a humanitarian approach by settle the dues with the students, Krishna said.

The state and central governments should take steps in this regard and include the amount needed in the budget, he added.