Latur (Maharashtra) based Maharashtra Nagari Sahakari Bank’s Shivajirao Patil has written a letter to the Union Home and Cooperation Minister Amit Shah, urging the Central Government to simplify the process for Urban Cooperative Banks (UCBs) in recovering Non-Performing Assets (NPAs).
In his letter, Patil pointed out that prior to the enactment of the SARFAESI Act and the issuance of 101 circulars, UCBs could initiate NPA recovery by seizing mortgaged properties directly.
However, recent provisions now require banks to seek approval from the District Collector and Tehsildar before taking possession of properties, adding significant delays to the process, he said in the letter.
He emphasized that District Collectors and RDCs are often preoccupied with other administrative responsibilities, leaving them little time to address NPA-related matters, thereby creating a bottleneck for banks.
Patil stated that this procedural delay is hindering timely recovery and causing financial stress for UCBs.
To address this issue, Patil proposed granting the Cooperative Department similar powers as other financial institutions to handle NPA recoveries directly, without the need for prior approval from district officials.
He urged the Central Government to revoke the existing rule and empower the Cooperative Department to expedite recovery proceedings, ensuring smoother functioning for UCBs.
The issue has triggered discussions in cooperative banking circles, as many cooperative bankers believe this change could bring the much-needed relief to struggling urban cooperative banks across the country, Patil noted in his letter.