“Our bank is using the services of detective agents to identify the other assets of the borrowers in cases where there are no securities or shortfall in security,” M Narendra, chairman and managing director, Indian Overseas Bank told HT.
Private lenders are also adopting similar strategy to trace undeclared assets of defaulters.
“Often it is not known what assets and properties the defaulters own or whether they are not disclosing them, we have decided to get very stringent with our assessment and we are hiring agents and using various means to find out the financial status, assets held by the defaulters,” a senior executive at a private sector lender who did not wish to be identified said.
Government sources said that the banks have also resorted to legal options, which include the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (Sarfaesi Act, 2002) — that gives power to banks and financial institutions to auction residential and commercial properties of borrowers when they fail to repay their loans.
The government is also monitoring the situation and banks have been asked to set up separate verticals to recover money from written-off accounts.