Banks casual in granting big loans, strict with small borrowers: SC

New Delhi: The Supreme Court has said banks like are “casual” while sanctioning massive loans to big corporate entities, but impose “stringent conditions and tedious process” amounting to “borderline harassment” on ordinary citizens seeking small loans for personal reasons.

Expressing its displeasure over the “troubling trend”, a Supreme Court bench said the government needs to frame a policy with respect to concessions or incentives in giving loans to ordinary people, so as to give the maximum benefit to those at the lowest rung of the social or financial strata.

However, the bench comprising Justices Ahsanuddin Amanullah and R Mahadevan said it was in no way suggesting easing of rules and requirements for loan facilities, which was best left to the Reserve Bank of India and banks to decide. But the procedure so adopted could certainly be made easier and fairer for loan seekers or applicants and thereafter at the stage of recovery also, it said.

The court was hearing an appeal by Bhaskar International and others challenging a Punjab and Haryana High Court order directing authorities to help take physical possession of the borrower’s properties under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The court said in this case, there has been “negligence” on part of SBI and its officials in granting/sanctioning a loan of over ₹8 crore to the company, for the reason that the company could not even start repaying the loan. Tentatively, this is a clear indicator that a proper assessment was not made of the capacity of the borrowers to repay, the judgment earlier this week stated. The top court refused to interfere with an execution decree filed by SBI for taking over the properties of Bhaskar International, but allowed the company to seek relief from the Debts Recovery Tribunal.

“Whilst recording our displeasure at such workings, we leave it for a more fit case where specific orders may be called for against such practices of the banks in general, including the SBI,” the court said.