Budgam trader gets Rs. 1.60 Cr TOD without security; turns NPA
FARHAN BUKHARI
SRINAGAR, Nov 19: Jammu and Kashmir Bank has fraudulently granted an Overdraft facility worth Rs. 1.60 crore to a businessman from central Kashmir’s Budgam district without any tangible security.
According to the documents in possession of Kashmir Despatch, the J&K Bank business unit Polo View, Srinagar has granted a Temporary Over Draft (TOD) facility to the tune of Rs. 1.60 crore to a blue-eyed person Abdul Hamid Parray, a resident of Bon Makhama, Magam Budgam apparently for business operations for a period of 60 days.
Accordingly, an amount of Rs.1.00 crore was disbursed in favour of the beneficiary in March 2019 but the account is now a chronic Non-Performing Asset (NPA) for the said branch with an outstanding of over Rs.1.28 crore.
As per the notarised guarantee deed of the TOD, the said facility has been sanctioned by the J&K Bank authorities against just one Post Dated Cheque (PDC) for an equivalent amount and a third-party guarantee of four people for a period of 60 days only, in violation of the guidelines.
The bank has not taken any primary security (tangible security in the form of immovable assets) for such a huge loan facility only to be repaid by the borrower after 60 days.
How could it be possible for the bank to recover the huge amount from the salaries of the guarantors within 60 days, is a big question?
According to Standard Operating Procedure (SOP) for bank ODs and TODs, the entire liability lies on the head of the concerned branch head.
However, the concerned Business Unit has been shielding the branch head ever since on the pretext that the sanction for the TOD has been given by the corporate office.
A temporary overdraft or a TOD is an overdraft usually extended from anywhere between 30 to 90 days as per the requirement of the account holder.
If the bank has given its account holder a 30 days temporary overdraft, and if the account holder uses his overdraft facility; he must repay the overdrawn amount within 30 days.
Ironically, the concerned branch has not sought any legal opinion from its own law department nor has it bothered to get it vetted by a legal expert before disbursing the money.
What makes this TOD sanction shadier is that one of the guarantors has not even signed the guarantee deed, but the bank has disbursed the money in hurry.
In reply to an RTI application, the bank refused to divulge the information like reason to grant a TOD facility of Rs. 100 lacs to Abdul Hamid Parray, by Polo View branch when he actually resides in Makhama, Magam, Budgam; actual collateral needed as per the standard banking norms to avail such TOD facility; details of collateral security and mortgage taken by the bank for such a huge amount granted as TOD facility; actual purpose of the said OD facility granted; details of the inspection(s) conducted by the said B/U to ascertain the genuineness of purpose and utility cum end use of the amount granted as TOD to the borrower for the intended purpose. The bank said this information can not be given on fiduciary grounds.
The guarantee deed for the TOD undertaken by Polo View branch is prima facie illegal and lacks any validity based on the facts that it neither mentions the sanction conveyed by the bank authorities to the said TOD facility nor does it carry any reference which shall go on to prove that the deed is actually of that of the TOD facility availed by Abdul Hamid Parray.
The guarantee deed mentions that the TOD facility has been granted against a PDC for an equivalent amount and the third-party guarantee of four government employees, which is against the banking norms.
The said loan facility has not been secured by the B/u with any primary security that is, some immovable property.
The guarantee deed has signatures of only three employees while the fourth guarantor has not signed the deed. However, his account has been frozen. There is no witness recorded in the guarantee deed and the space has been left blank.
The guarantee deed has not been “Accepted by the Bank” itself and the said space has again been left blank.
There is no record with the bank regarding the end use of funds availed as TOD by the borrower. While Parray is the primary borrower, there are others who are part of the group involved in fraudulent diversion of money after availing it from one bank or the other.
“I can’t comment much on the issue. However, one thing is clear that the sanction has come from the higher ups, so any branch head would have disbursed the funds and followed the orders. This account had initially a limit of Rs. 20.00 lakh and has been gradually increased,’’ a bank official told the Lok Adalat in District Court Budgam where this case came up for a hearing recently.
