rsajan's blog

let us have more nuclear plants, more deforesting!

R Sajan — Sun, 13 Mar 2011 21:41:11 +0000

What is happening in Japan should open our eyes to the dangers of nuclear plants.

People in Kerala should now realise the dangers of senseless deforestation which is making their districts like Idukki earthquake-prone. Idukki has a number of dams which adds to the risk.The more-than-hundred years old Mullaperiyar dam is there, a crack to which can wipe out three districts.

HDFC CORPORATION MISUSES SARFAESI ACT

R Sajan — Fri, 27 Aug 2010 14:20:07 +0000

The global economic meltdown began when housing financiers in the USA
started indiscriminately cracking down on borrowers. This was later on
named the Housing Tsunami. If we are not be similarly placed in the
near future when no one might be looking, our ways in these matters
need changes of motives and procedures.

I recently came across HDFC, the largest private housing financiers in
India advertising that their Cochin office had taken over some
properties for non-repayment. The majority of the cases had total
outstanding balances of less than Rs. 1.75 lakhs, to read from the
advertisements. Considering that even a Cent of housing property in
Ernakulam district is worth more than Rs. 2 lakhs, this seemed to be
over enthusiasm for some reason on the part of the lenders.

It was seen that these loans had all been taken around 2002-2003 when
the interest rates were around 7 or 8%. Within a few months however,
rates began to climb. Currently, this particular lender charges 12.5%.
The extra interest on each defaulted EMI is 18% additionally. The
pathetic situation of the non-wilfully defaulting borrower can be
imagined. The initial rosy interest rates offered are called Teasers;
to tease the innocent public with!

In the current scenario, the borrower would have to again pay at least
Rs. 5000/- extra per lakh for each year of the loan, to get his title
deeds back in the end even if agreed instalments are regularly
remitted. This is because interest has been raised to 1 ½ times
arbitrarily after getting the borrower to sign for the loan at 7 to 8%
interest. If it be a twenty year loan, he ends up paying Rs. 1 lakh
additionally for each Rs. 1 lakh borrowed, over and above the
originally agreed repayment. If three instalments are defaulted, the
loan becomes an NPA and within 6 months of continued default, this
lender moves in under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
[SARFAESI], no questions asked. This draconian law was put in place to
hide and shift from bank officials, accountability of deliberate bad
loans. The take-over of property draws attention away from official
misdemeanours in processing, sanction and conduct of the bad loans. The
fixing of NPA at the end of three months is even anti-Indian when we
admit our slow pace of national life.

The RBI has laid down that a defaulting borrower should be advised in
advance of the lenders’ intention of deeming him a wilful defaulter;
his objections to it should be called for and heard. This is not done
by the Company or for that matter, by most banks. It might be that the
default is due to temporary issues like illness or loss of job. What
the non-wilful defaulter receives out of the blue at the end of six
months of default is a Notice telling him that his property would be
taken over if he does not remit the entire dues and costs within 60
days. Till recently, the borrower had to first remit 75% of the dues if
his petition against re-possessing was to be even admitted by Courts.
Even now, the waiving or fixing of such remittance is left to the
discretion of the Judge. While the Act requires the Notice to be issued
only by an authorised officer of the financier, HDFC gets a top lawyer
to issue it. The charges of Rs. 5000/- for that small notice is
immediately loaded into the loan dues.

At the end of the 60 day period, the Company would make a request to
the Collector. The lower officials would then be properly met by the
Recovery agents of the Company and assistance of the Revenue and Police
officials are immediately made available for possession of the house by
the lender.

This procedure at the Collectorate is merely anti-people. Housing field
or elsewhere, it is known that private banks and financiers falsify
their accounts. Anyone that has been taken to Court by the new
generation banks about a Personal Loan knows it. Huge hidden and
coercive charges are loaded into the final dues position. The amount
demanded in recovery is invariably very much more than is legally
eligible. Nevertheless, at the Collectorate, no questions are asked and
the Police and Revenue staff is enthusiastically released to the
Recovery agents.

Ideally, the Collector should make independent enquiries of each case,
call up the defaulter to hear him and only then move to the final
catastrophe. It is from dearly held dwellings that the eviction based
only on the statements of the often fraudulent lenders is to be done!
And no Keralite would ever default on a housing or gold ornament loan
unless it is his suicidal only option. No middle class borrower can
fight the financier in Court because of the financial might of latter
to get the costliest lawyers.

I enquired about why the final dues in the aforementioned cases were
less than Rs. 1.75 lakhs and yet such drastic measures were employed. I
was astounded to hear that the actual dues are even less! And this is
how it happens.

RBI has instructed that if the dues are Rs. 1 lakh or less, coercive
measures of recovery should not be used. Such dues are to be only
settled on arbitration. To overcome this difficulty, the Company has
ways of bringing the balance to above one lakh. The intended possession
of the property is advertised in all the editions of the biggest
newspaper of the Company’s choice. Advertising costs come to around Rs.
50000/-. Each demand call by the Recovery officials is charged to the
borrower at a minimum of Rs. 750/- per visit. Expenses of recovery
procedure at the government official levels are at least Rs. 25000/-
and may go up to any amount. Thus even if the loan dues is only Rs.
20000/-, the amount claimed for recovery is easily boosted to above
Rs.1 lakh. There is no mechanism anywhere to check costs of such
recovery procedure. Neither government nor the law comes to the poor
innocent defaulter’s aid. In the cases we talked about earlier, the
actual dues were only around Rs. 75000/- to Rs. 90000/-.

It might be that the Company’s Recovery officers who engage the
Recovery agents etc have vested interests. I was told that the same
group of buyers purchase all the property put to auction by the
Company, in different names. One might suspect some collusion here. The
Recovery officers of Kochi told me that their NPA rate is 0.7% as
against 0.8% of the Company’s national average and therefore, they do
not care about customers’ difficulties. Their motive is to reduce their
NPA rate further. They cannot be bothered about any social commitment.
They advise the borrower to sell the property and offer to find buyers.
Imagine a borrower in temporary difficulties being thus coerced into
selling his 10 cents with house so that a Rs. 10000/- or Rs. 20000/- of
overdues can be normalised in the Company’s books. They gloat over it
that in the case of a KSEB employee of Angamaly with an overdues of Rs.
24000/-, intervention by even Sri. Oommen Chandy could not prevent them
from seizing the 10 cents and house near Nedumbassery airport!

At least three fourths of all the houses built in Kerala during the
past ten years, especially by the middle classes and NRIs, are
mortgaged to companies like this and new generation banks. It is
obvious that a predatory style is adopted by the financiers. If we do
not move in to put in checks now itself, the consequences might be
catastrophic.

The lender has rights to be repaid. At least in the housing sector
however, a humane approach to recovery is not a sin. Lenders should be
made to hear the borrowers as stipulated by RBI, before treating them
as wilful defaulters.
As said in the RBI’s handbook on NPAs, one is
a wilful defaulter only if he has funds and yet, does not remit. The
SARFAESI is not applicable to agriculture debts, dues below Rs One
lakh; and to non-wilful defaulters as per the Act. This is so even
for corporations with dues of Rs. 50 crores or above. An NRI or
employee that loses a job or falls ill does not come under this
category. The bankers and financiers do not however, take this into
account. The procedure for treating such borrowers has also been
stipulated by RBI. The lender should only re-structure such loans
allowing the borrower more time or lesser instalment amounts. This is
at least thought of by our lenders only in the case of very big
borrowers to help them. And in the case of PSBs, a final assistance is
always done to big borrowers by settling for a much lower amount than
the dues. Often, the money thus given runs to crores. But not so, to
middle class house owners with two or three lakh debts, trying to cling
on to their only tangible asset!

Collectorates should hear the defaulter before acquiescing to the
arbitrary requests of lenders to help them take over houses and evict
the owners. They should if necessary, even intervene between the two
parties so that emotional and other disasters do not occur. Any popular
administration should do so.

Unfortunately, the media that has to consider advertisement revenues
from big lenders often fail to highlight this situation. A covert
meltdown therefore, awaits Kerala’s middle classes to whom a house of
their own is the ultimate dream, only due to administrative and media
apathy.

Hail Amitabh Bachchan; Boo CPM!

R Sajan — Thu, 25 Mar 2010 20:07:37 +0000

From Bachchan’s Blog, about Kerala’s inviting him to be their Brand Ambassador and then saying no.

Making me deliberately political, the idea is not to dissuade me from accepting the position, but indeed to get many of their facets and shortcomings an endorsement for integrity. You want to stop me from promoting tourism in a State, because you have reason to believe that there are political connotations to the event. This is such rubbish ! All I shall be doing will be the working in a short film that shall highlight the various places of interest in the State, so that it encourages more tourists to visit the region. And that is what I would precisely do when I would be asked to similar acts in Kerala. It is a petty act of cheap convenience to prevent me from doing that, and by pitting me up against political connotations and maneuvers without paying any respect for the actual work that would be done. Fair enough ! I shall abide by the judgement of the State Government. I did not ask them for it, they came forward with the invitation, I accepted, now they want to decline it, fine. Not the first time such incidents have happened. Invitation to be chief guest at the Goa International Film Festival and when I get there, they decline it. Fine !

It is a common Indian media trait - finding fault at any cost to any act or event. Merit for the moment and the work, not interesting enough to sell and so …. demerit the moment ! And in such matters if you could highlight a celebrity, preferably from the film world, into the matter, you would have discovered a way and means to keep the story rolling for a few weeks.

You take umbrage at my association with Gujarat, but never have the guts or courage to stop a Ratan Tata, or an Ambani from investing in the state and running successful factories and ventures there. Would you have the guts to tell them to not associate with the State, to pull out all their investment and man power they build through years and years of their ‘association’ ? I guess not. You would happily bring politics into the matter just to dissuade. But what good does that do to a person that is non political. Reason and common sense overrides all else in moments like this. Such a shame really. You visit a foreign country and they decorate you with respect and dignity - Morrocco, UK, USA, France, Mid East, South Africa, China Hong Kong … and you come back to your own country and they have nothing but ugliness for the subject and your merit.

Reason enough to leave this excessive topic and move towards more pleasant times !!

A shocker-16,000 student suicides in three years

R Sajan — Mon, 11 May 2009 19:26:00 +0000

KERALA JUDGE FINDS NO POLICE HELP AGAINST PARTY GOONDA

R Sajan — Mon, 11 May 2009 06:14:00 +0000

Argument on Aluva’s place-name origins

R Sajan — Tue, 28 Apr 2009 18:57:00 +0000

Taliban executes 14-year-old girl for planning to elope

R Sajan — Tue, 14 Apr 2009 22:08:00 +0000

In Kerala, they don’t throw shoes!

R Sajan — Mon, 13 Apr 2009 06:51:00 +0000

In Kerala, they do not throw Chappals!

R Sajan — Mon, 13 Apr 2009 06:01:11 +0000

Throwing Chappals is the in-thing in India now. We are a great people for imitating others.
In Kerala however, this ['throwing'] has been a usual procedure during strikes and Bandhs which they have daily.

As usual, the CPM showed the way. For the past 40 years, striking or agitating CPM guys have thrown things at non-participants.

They do not throw shoes [few wear shoes] or chappals though, because both are costly. Instead, they throw human excreta on the enemies. Striking government employees and teachers use nothing else, because they are educated, perhaps.

A few years ago, a member of the State Human Rights Commission took some action against some CPM civil servants and woke up one morning to find his entire house painted with human excreta. The Police refused to collect the material evidence and the investigations were a non-starter.

During Election time now, CPM cadres rough up journalists that they do not like, everywhere. So far, the journos have been protesting by holding protest marches. Since ‘throwing’ is more effective, they might soon turn to it to protest. One hopes Kerala media men would not use the favourite Kerala material to throw at politicians.

Perhaps, they should. They are the ‘model state’ that the rest of India looks up to.

Non-issues of Kerala

R Sajan — Sat, 11 Apr 2009 19:46:47 +0000

Kerala is known as a place where everyone is literate, where many are abroad and where the politics is all Red.

But they are masters of hypocrisy as well. In the Elections 2009, their politicians discuss only Israel, Palestine, secularism etc. Never water shortage, unemployment, corruption, bureaucratic ineptitude or pollution.

They are easily deceived into such issues by the TV channels.

The people watch TV and read newspapers; and argue about Israel while there is no clean water, air or enough rice.

A funny people!