Banking

Beauty of Boundaries 

One of our Branches has sanctioned and disbursed Housing Loan of Rs 15 lacs to 

construct Residential Building in one plot (Plot C in the diagram furnished below) 

owned by Mr Ramji , the Borrower. Branch has obtained Personal Guarantee of one 

Mr Kishanji, friend of the Borrower. 

 

Entire loan amount was disbursed. Repayments are regular in first 6 months from 

the date of commencement of Repayment. Subsequently, the loan has become 

sticky and borrower is not responding to our calls.  

 

It is learnt that the family of the Borrower had left the town and where abouts are 

not known. 

 

We have served Notice under SARFAESI Act. Copy of the said Notice was pasted 

by Branch Officials at the Residential Building mortgaged to us.  

 

During the time when our Branch is taking action under SARFAESI Act, I happened 

to visit the said Branch (I was placed in Circle Office). The Branch In-charge and 

myself were going to meet one of our Best Customers in the town and the house 

property in the subject case is in the same route.  

 

The Branch In-charge wanted to see what happened to Notice under SARFAESI Act 

which was pasted at the said house just two days back. To our surprise, Possession 

Notice of Syndicate Bank was also pasted at the same property. On enquiry with 

Syndicate Bank Branch we have come to know the following : 

 

They have Sanctioned HL of Rs 15.00 lacs to Mr Kishanji, to construct Residential 

Building in plot (Plot B in the diagram furnished below) owned by him. They have 

obtained Personal Guarantee of Mr Ramji (our Borrower). 

  

Guarantor in case of our Loan (Kishanji) and Borrower of Syndicate Bank is one and 

the same. As the loan account has become sticky, Syndicate Bank also initiated 

action under SARFAESI Act. 

 

Rough Sketch of Site Mortgaged to us : 

 

Agriculture Lands and Drainage 

Plot A Plot B 

Plot C Plot D 

Road 

 

  

Plot B was mortgaged to Syndicate Bank and Plot C to our Bank. Property 

mortgaged to us is diagonally opposite to the property mortgaged to other Bank. 

 

After a detailed enquiry the following have come to light : 

 

1. Both our Borrower (Ramji) and Borrower of Syndicate Bank (Kishanji) have availed 

loans at the same time.  

 

2. However, only one Building was constructed ,in Plot B, for which Syndicate Bank 

has extended finance.  

 

In Plot C (financed by us) there is no construction at all.  

 

On a perusal of our papers related to the said housing loan, Photos at different 

stages of construction along with Visit Reports submitted by different Officials are 

observed. On a careful observation, we have come to know that the said photos 

are related to house financed by Syndicate Bank. 

 

After detailed enquiry we came to know that all the officials who have submitted 

Visit Reports on different dates, have actually, visited the site and witnessed the 

progress in construction. However, as they have failed to verify boundaries of the 

site they were duped by the Borrower and Guaran

  

During the visit by our Officials, they used to see the construction in Plot B and 

they have certified. Also they have never verified whether the construction is as per 

Plan Approved. 

 

Hence, we have to verify boundaries, landmarks, extent of site and also whether 

construction is as per Plan Approved. 

 

It is advisable to visit the Construction Site independent of Borrower or his agents 

at pre-sanction stage and also during post sanction (disbursement ) stage.  

  

 Names have no relation with actual persons