At Hyderabad:

The state of Telangana and many banks in the public sector are struggling with mortgaged lands and properties that are built by loan defaults, worth thousands of crores in total. The new scam by Trident in which CBI bought hotel developers near Hitech for Rs 1,285 crore bank fraud, is just adding to the current tussle between the state and the banks. This scam has been rejected by the CBI. In the case of developer failure on the intent of the allocation, when the State government seeks to retake possession of land parcels, the banks contend that the government had allowed the property to mortgage and that it could therefore not recover land and properties constructed on it.

The records indicate that the government of Andhra Pradesh has leased approximately five acres of construction, running, and transporting a hotel project (BOT) after 33 years to a consortium of companies. Originally, Trident was to be built as a 5-star hotel at the cost of Rs 214 crore; however, the size was increased to two hotels, Trident and Oberoi. The project cost up to nearly Rs 1.300 crore, while the second hotel was still unfinished. The hotel building has a curious appearance when the start of the second hotel halted halfway. Half of the structure is a skeleton, next to the Trident.

It has also been disclosed in documents that Golden Jubilee Hotels Pvt Ltd, for which the CBI had booked the case, had committed to lenders to deposit the entire turnover with the Bank of Baroda into an escrow account. However, it then charged that without its knowledge and consent, the holding firm had transferred the sums into a separate bank account. It is clear from the arrangement that the scheme is BOT-based and becomes state property after the concession. We have to travel quickly to protect our rights, said this correspondent by a senior tourism official.

Similarly, in the Prime Khajaguda district, the State Government ordered the resumption of five acres that were donated to one of Dr. Krishna Swaroop Reddy by the then YS Rajasekhar Reddy government on the premise that he will construct a state-of-the-art hospital, and deal with the poor there. A former member of the Rajya Sabha, who had enormous influence during the YSR, was allegedly killed. Three years later for Rs 90 crore the doctor loaned and defaulted on the property to the Andhra Bank. The prime minister came against the government order that the five hectares of land be resumed. ‘We’ve fought several such incidents,’ the confidentiality requirement of a bank official said.

Public sector banks can have to bear a charge of €1,800-2,000 to pay for the moratorium in March-August 2020 as part of a new Supreme Court judgment on the suspension of compound interests in all loan accounts. In November of last year, the ruling included loans over the uppermost level of 2 crores as loans below this amount. The government spent ~5.500 crores during 2020-21, the compound interest support system for the loan moratorium, and protected all borrowers including prompt borrowers who have not taken advantage of moratoriums. According to bank sources, 60% of borrowers originally used moratoriums, and the number eventually decreased to 40%, even less as collecting was quickly enhanced. In the case of a business, this was just 25% for banks in the public sector.

They also stated that for the time a creditor has used a moratorium, the banks would include a compound interest waiver. For instance, the exception for that time would be if a creditor has a moratorium of three months. RBI declared a loan moratorium on collections of term payments due for the pandemic from 1 March to 31 May 2020, which was later extended to 31 August last year. This time, the Supreme Court order just restricts the liabilities of the public sector bank to those who have used the moratorium, so that according to rough estimates, sources say.

Furthermore, they said that the order did not provide for a compound interest settlement schedule, unlike the last time, so banks were able to develop an adjustment mechanism or settle it phased. In the meantime, the Association of Indian Banks (IBA) has written to the state to reimburse creditors for interest waiver interest. Based on different aspects, the government will make a decision. Last month the Supreme Court ordered that for the six-month loan moratorium declared last year during a COVID-19 pandemic.

No borrowers should be paid for any portion or punitive interest, and any sums already charged would be reimbursed, credited, or modified. In a decision of the Center and Reserve Bank of India (RBI), the apex tribunal declined to intervene, stating that this is the policy decision, to not extend the loan moratorium past 31st August last year. The court held that rejecting petitions for a full waiver of interest would affect the economy. The bank also stated that exemption from interest would harm depositors. Also, appeals for additional relief in the case have been dismissed by the judge.

CMDs and CEOs of PSU banks will now ask LOC to warn immigration checkpoints to avoid anyone fleeing India, said the Home Ministers’ official to the Home Minister’s, the Ministry of External Affairs, the customs and income tax departments, the directorate of income intelligence, the CBI, state passenger authorities and the police. The SFIO and PSU banks will launch the proceeding if the defaulting officer is suspected that the defaulting party can escape the statute. In previous years, investigative authorities were pursuing LOCs in identifiable IPC crimes or other regulations where, through non-leverage warrants given, the suspect escaped capture or did not appear before the judge, and the defendant was expected to avoid arrest.

In an attempt to deter them from leaving the country, the Union government empowered the chief executives from state banking (PSBs) to seek out a circular LoC, said officials of the senior finance ministry on Thursday. This is a big move as it would enable the PSBs, even before an FIR is reported against them by inquiries, to warn authorities to avoid intentional defaults

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