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Our Bureau

Hyderabad , Oct. 20

IN what could be considered a major relief to the potentially viable sick units in the small-scale industry (SSI) sector, the Debts Recovery Tribunal (DRT) at Hyderabad has directed the State Bank of Hyderabad (SBH) to release the assets of a rice mill it had seized.

The order of the court was aimed at enabling the restoration of rice mill operations in the wake of changed agro-climatic conditions and to protect the livelihood and shelter of the rice mill owner, who was a borrower of SBH.

Disclosing this in a press release here, the Andhra Pradesh Incipient Sick SSI Federation (APISSSIF) said the DRT had considered the specific facts of the case, pertaining to Venkata Lakshmi Narasimha Rice Mill located in Jilugumadu village in Madhira mandal of Khammam district, and the acute need of supporting rural wage employment. The mill proprietor, Mr Sadineni Narasimha Rao, appealed before the DRT against the SBH action of seizure of the mill assets on March 25 last year.

In response, the DRT not only asked the bank to restore the rice mill to its proprietor before October 16, but also directed the borrower to resume it immediately and pay Rs 25,000 per month to the bank from December this year. Responding positively to the DRT decision on the grounds of equity, the SBH officials handed over the rice mill to the borrower last Saturday.

Admitting that the Securitisation Act was unavoidable for a sound economic system comprising healthy financial institutions, the APISSSIF Vice-President, Mr M.K.D. Prasad, urged the authorities to balance the interest of financial institution with the dynamics of the society.

Mr Prasad said the banks, which had expedited their recovery measures after the Securitisation Act was upheld by the Supreme Court, were outright in their approach and were not showing any leniency in the case of SSI units that were not wilful defaulters. The banks were deferring their liquidation measures in the case of sick SSI units, more particularly agro-based industries that were at the mercy of the vagaries of climate.

The Federation criticised the banks for not being prepared to extend revival and rehabilitation package to potentially viable sick units. Owing to severe drought conditions prevailing for the past three years in Telangana region, several rice mills closed down operations, while farmers were resorting to the extreme step of committing suicide.

The APISSSIF has taken up the cause of ailing Rice Mills with the State Government for their release, rehabilitation and revival, Mr Prasad said.

More Stories on : Non-Performing Assets | Courts/Legal Issues | Andhra Pradesh

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