UCO BANK CIRCULAR
UCO BANK CIRCULAR – Dt. 27.1.2017
Ref.: Com/EC/ 71 /2015-18
27th January, 2017
All Office Bearers, EC Members & Units
Re: Exposé Three: – Compromise Proposal dated 26.5.2014 for Rs.16.50 lacs against total dues of Rs.30.89 lacs: NPA A/c no. 00400610000458 of Sri VSSK Kiran with M.G.Road, Secunderabad Branch- Malfunctioning of administration at ZO, Hyderabad- Bank exposed to avoidable loss
We reproduce hereunder the full text of our letter no. Mg/99/2015-18 dated 27th January, 2017 addressed to the Managing Director & CEO on the above subject for information of all concerned.
S Roy Choudhury
“It has been brought to our notice by our Andhra Pradesh & Telangana Unit as to how malfunctioning of administration at ZO, Hyderabad by not responding to the administrative requirement at appropriate time has exposed the Bank to avoidable loss. Cited below is the case wherein you will please find glaring instance of administrative inaction of ZO, Hyderabad the reasons of which are best known to them only:
1. Sri VSSK Kiran, son of Sri V. Satyanarayana ( EMP. No.14893), since retired from our Bank, was first sanctioned an Education Loan of Rs. 2,17,000/- in August, 2002 for pursuing Bachelor of Engineering in Anna University, Chennai from our Banjara Hills Branch. Sri Satyanarayana, while he was Senior Manager at Banjara Hills Branch, retired from service in 2010.
2. Subsequently, Sri Kiran was sanctioned a top-up Education Loan of Rs.15,00,000/- by Regional Office, Hyderabad in February, 2007 for pursuing Post Graduation M.S in Information Technology at Melbourne Institute of Technology, Australia . This loan was disbursed by our M.G. Road, Secunderabad Branch.
3. Sri Satyanarayana was guarantor in the case of first education loan to his son and he was Coapplicant in the above said top- up education loan.
4. For the first loan, the security stipulated was lien on PF and Gratuity of Sri Satyanarayana apart from his guarantee. For the second loan extension of Equitable mortgage over the house property bearing no. H.No.22, D-1-9, Ramakrishnapuram, Eluru, West Godavari District on which housing loan was availed by Sri Satyanarayana was stipulated apart from lien on his PF & Gratuity.
5. Originally, EM was created at Eluru Branch on the above said property in 1982 for housing loan to Sri Satyanarayana. Extension of EM was supposed to be done at Eluru Branch over the same
6. It is reported that Eluru Branch is not having the above said title deeds now though the Education Loans are outstanding.
7. Neither the Bank has made FDR from terminal benefits of Sri Satyanarayana and kept under bank’s lien for repayment of outstanding balance in Education Loans nor any extension of Equitable Mortgage as per sanction terms is reportedly available.
8. The first loan is reported to have been classified as NPA in June, 2011 with o/s. balance of Rs.4,49,118/- and the second loan as NPA in Sept, 2012 with o/s. Balance of Rs. 21, 48, 826/- against which no security is purportedly available.
9. On an independent verification, it has reportedly transpired that the land measuring 430 yds. standing in the name of Sri Satyanarayana which was under EM for Housing loan to him is actually of 230 yds. Thus the valuation of the property at Rs.25 lacs in Sept,2006 is nothing but inflated presumably for the purpose of the top-up education loan to his son.
10. Reportedly Sri Satyanarayana has another property situated at Flat No. F-2-501, Indu Aranya Pallavi Apartments, Tattiannaram Road, GSI (Post), Hyderabad the value of which is reported to be Rs.45 lacs. This may also be verified independently.
11. The subject compromise proposal dated 26.5.2014 for Rs.16.50 lacs against total dues of Rs.30.89 lacs at that point of time was recommended by the then Asstt. General Manager & Branch Head, M. G. Road, Secunderabad Branch reportedly at the request of Sri V.Satyanarayana (EMP no. 14893), Co-applicant and father of the borrower stating reasons as illness of Sri VSSK Kiran and recession in Australia as impediment to find suitable employment.
12. As the compromise proposal was a departure from the laid down policy guidelines of the Bank with suspected malafide actions at different point of time during the tenure of the loans, our Andhra Pradesh Unit brought the same to the notice of the then Zonal Head, Hyderabad in 2014 and requested for proper investigation into the matter to get into the facts leading to the entertaining of the said compromise proposal. Repeated reminders by the Andhra Pradesh Unit thereafter have not evoked any response from the Zonal Office, Hyderabad and the office is quietly sitting over the compromise proposal.
13. Incidentally, Sri Satyanarayana was General Secretary of Andhra Pradesh UCO Bank Officers’ Association, affiliated to AIBOA at the time of his retirement in 2010. Now he is Chairman of Andhra Pradesh UCO Bank Officers’ Association, affiliated to AIBOA.
Under the above backdrop of the case, we, as a responsible majority union of Officers of UCOBank, consider it as our bounden duty to bring to your notice the following few points in the interest of the Bank and seek an independant investigation into the matter from vigilance point of view and also your appropriate action as per policies/guidelines of the Bank in vogue against the persons found accountable:
a) Both the education loans to Sri VSSK Kiran, son of Sri V. Satyanarayana (EMP No.14893), retired Senior Manager have been reported to be without any tangible security today as neither any extension of Equitable Mortgage is there nor any FDR has been made out of terminal benefits to Sri Satyanarayana and kept under Bank’s lien as security for the outstanding loans.
b) Disbursement of the education loans without complying the stipulated sanction terms had possibly taken place either under undue pressure from some quarters vested with powers or in complicity with the co-applicant, Sri Satyanarayana, the then General secretary of Andhra Pradesh UCO Bank Officers’ Association, affiliated to AIBOA.
c) It is apprehended that the title deeds under mortgage at Eluru Branch were withdrawn from the Branch on liquidation of housing loan of Sri Satyanarayana in June 2008.
d) As no tangible security is reportedly available to fall back to recover the outstanding dues of the Bank, the co-applicant has found it easier to come up with the above compromise proposal so that he can get rid of his liabilities under the co-obligation at the cost of the Bank. Had there been any tangible security, the minimum compromise offer could not have been less than the realisable value of the security as per RBI guidelines- this has gone to the advantage of the co-obligant.
e) The role of the then AGM & Branch Head, M.G.Road Secunderabad in recommending the compromise proposal which involved substantial loss of Rs.15 lacs( approx.) at that point of time without examining as to how the funds out of terminal benefits to Sri Satyanarayana were not available to the Bank as security for the loan as also how no equitable mortgage over his property as per terms of sanction was available cannot be said to be fair and just as the same is conspicuously partisan and biased possibly to give relief to Sri Satyanarayana against all norms of the Bank.
f) The role of the Zonal Heads, Hyderabad since 2014 in not getting the matter investigated to unearth the truth is surely not befitting their position in the administration. We await your quickest and appropriate action as solicited hereinabove.
S Roy Choudhury
General Secretary” Unquote