Article
link:
Read
more
Extract from the article:
The Bombay High
Court has invalidated the authority of chairmen, managing directors, and CEOs
of public sector banks to request the issuance of Lookout Circulars (LOCs).
The escape of
high-profile defaulters from the country to avoid repercussions and retrieve
the money borrowed had led to a surge in LOC requests in recent years.
My
Take:
Guarantors
of Bank Loans: You Were Warned
Reflecting on the
essence of the court's decision, where the power to issue LOCs has been
curtailed, it aligns with the stance I took in my blog.
Back in
2011, I emphasized the need for stringent actions against defaulters,
urging banks to refrain from offering further advances to defaulting entities.
This proactive measure now resonates with the need for legal actions against
those fleeing the country to avoid responsibilities.
Wilful
Defaulters and Wilful Lenders: A Transparency Call
The recent focus on naming and shaming defaulters who try to evade
repayment obligations echoes my sentiments from a 2016 blog post.
I highlighted the
transparency practices of housing societies in Mumbai that
publicly list members failing to pay dues. Drawing a parallel, banks can learn
from this approach and consider disclosing details of loan-takers and
their obligations to promote financial accountability.
Call
to Action:
To the legal
authorities overseeing financial regulations and accountability,
I urge a continued
push for transparency and stringent measures to hold defaulters accountable.
Strengthening
mechanisms to prevent loan defaulters from absconding and ensuring public
disclosure of defaulters' details can help maintain financial integrity.
Let's strive for a
system where defaulters face consequences and where the public has access to
crucial financial information for a more accountable financial ecosystem.
---
With regards,
www.HemenParekh.ai / 01 Nov
2024
No comments:
Post a Comment