Orissa gov to revise loan recovery lawsOrissa government to revise loan recovery laws. It is considering the implementation of a recovery act similar to the recovery Act of Uttar Pradesh.
Apnaloan.com Research Bureau
10 Sep 2007
The Orissa government has decided to revise its loan recovery laws to accelerate the process of loan recovery in government sponsored programmes.
The government has decided to make laws, similar to the recovery Act of Uttar Pradesh (UP).
The sub-committee formed for the relevant purpose will look at various provisions of the Act in operation in UP and suggest changes in Orissa Public Debt Recovery Act (OPDR). It will have representatives from the banks and the government.
State Bank of India (SBI) and UCO bank will collect basic field level data regarding the proposed changes in the OPDR Act by conducting field visits.
Some bankers had even suggested the implementation of the provisions of the section 9 (3) and 9 (4) of the chapter 3 of the UP Act, which was lacking in the Orissa Act.
Specific provisions in the UP Act empower the Tehasildar to recover loan dues even from legal representative of the debtor. However, there is no such provision for recovery of loan dues in the Orissa Act.
Also, the fees payable on the application for recovery is almost the same as that of civil suits and there is no provision of appeal in OPDR Act.
Keeping these drawbacks in mind, the proposal will be examined and amended suitably to incorporate these aspects.
The overall recovery rate of all banks improved to 49.67 percent in March 2007, compared to 41 percent by end of March 2006.
However, the recovery rate in government sponsored schemes continues to lag behind. The recovery rate for government sponsored schemes like IRDP/SGSG was only 36.25 percent by end of March 2007, under Pradhan Mantri Rojgar Yojana (PMRY), the rate of recovery was only 20.01 percent by end March 2007.