IOM- Recovery through Lok Adalat

Legal Department- HO
Thu 30/09/2021 11:58

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<Raigad.ARD@bankofindia.co.in>; Asset Recovery Department- Raipur <Raipur.ARD@bankofindia.co.in>;
Asset Recovery Department- Rajkot <RAJKOT.ARD@bankofindia.co.in>; Asset Recovery Department- Ranchi
<Ranchi.ARD@bankofindia.co.in>; Asset Recovery Department- Ratnagiri <Ratnagiri.ARD@bankofindia.co.in>;
Asset Recovery Department- Siliguri <Assetrecovery.Siliguri@bankofindia.co.in>; Asset Recovery Department-
Solapur <Solapur.ARD@bankofindia.co.in>; Asset Recovery Department- Ujjain
<Ujjain.ARD@bankofindia.co.in>; Asset Recovery Department- Vadodara <Vadodara.ARD@bankofindia.co.in>;
 Asset Recovery Department- Varanasi <Varanasi.ARD@bankofindia.co.in>; Asset Recovery Department-
Vidarbha <ARD.Vidarbha@bankofindia.co.in>; Asset Recovery Department- Visakhapatnam
<AndhraPradesh.ARD@bankofindia.co.in>;

Cc:ZO Group <ZO.ALL@bankofindia.co.in>;

Categories: Dinesh Singh

 2 attachments

SKM_266i210930124600.pdf; SKM_266i210930124500.pdf;

Ref No. HO:LGL:AS:823

Date:30.09.2021
INTER-OFFICE MEMORANDUM
From : To :
General Manager, The General Manager ,All NBGs
Head Office, Legal Department. The Zonal Manager All Zones,
headoffice.legal@bankofindia.co.in DGMs, All LCBs/ARBs/All Branches
REF: HO:LGL:AS:792 Date:27.09.2021
 
 
Recovery through Lok Adalat 
 
Lok Adalats are conducted by the National/State/District/Taluka level Legal Services
Authorities from time to time. Several Circulars are issued by us for optimum utilization of
Lokadalat as it is an inexpensive and speedy mode of recovery in NPA accounts. However on
analyzing the data relating to the settlements done though Lokadalat, we find that the results are
far from satisfactory. It is observed that though large no of cases/accounts are referred to Lok
Adalats, the percentage of settlement is as low as 3 to 6% which is not an encouraging figure.
We also observe that in many centres active involvement of the branch manager/ officials is not
seen and the borrowers/guarantors are not even contacted informing them to avail the
opportunity. Therefore, the following additional strategies to be adopted by the NBGs/Zones/
ARBs/ LCBs for better results in upcoming Lok Adalats:
 
a)                                  The conduct of Lok Adalath is announced in advance by the Legal Service
Authority and immediately upon such announcement, the
NBG/ZO/LCB/ARB/Branches should prepare the list of eligible accounts.
 
b)                                  Proper communication about settlement through Lok Adalat through post/e-
mails/SMS etc in local/vernacular language to be sent to all the eligible NPA
borrowers and guarantors inviting them to come forward for the settlement with the
bank. Vide publicity through notices/banners etc. should be made to reach out to the
Borrowers.
 
 c)                                  Pre-conciliatory discussions to be held by the NBG/Zones/Branches with the
identified borrowers and guarantors, in advance so that the settlement can be arrived
during such discussion which can be recorded during the Lok Adalat for an Award
on the agreed terms. Here the branch officials have an important role to play, ie to
contact and inform the Borrowers and guarantors about various schemes of the Bank
for settlement of dues and to bring them to the negotiation table.
 
d)                                Execution of the Award come into play, where the Parties default in payment in
terms of the Award. This Award can be directly enforced as a decree though the
Courts. In this regard it should be importantly taken care to incorporate the Default
clause in the Lok Adalat awards, which should state that on default in repayment as
per the settled terms, the borrower and guarantor shall be liable to pay to the Bank,
the entire contractual dues at the contractual rate of interest. Default clause
safeguards the interest of the bank in case of default by the borrower and it also acts
as a deterrent against Borrower committing further breach. The Lok Adalat Award
should be drawn accordingly.
 
e)                  Branches should closely follow up for payment of the settled amount within the
agreed time frame and if there is failure to pay the settled amount, the decree
execution for the full contractual dues should be done through the Civil Court/DRT,
as per the terms of Award.
 
f)                                    While it shall be the responsibility of the Zonal Manager to monitor the overall
conduct of the Lok Adalat including deputing officers having proper authority to
enter into the settlement during the Lok Adalat, the responsibility to reach out to the
Borrowers and guarantors and to bring them to the negotiating table shall be on the
branch. As discussed above, it would be ideal to negotiate and arrive at settlement
during the pre-conciliatory discussion, even if the same could not materialise, the
Manager shall take all efforts to bring such borrowers also to the Lok Adalat, so that
further negotiation can be done.
 
g)                  Branch Manager should have the numbers of all the borrowers/guarantors handy so
that proper communication can be established at all times.
 
2.         We advise you to take important note of this communication and make optimum use of
Lok Adalat. 
 
 
 
                       
                                                           
                                                                                  
    (V. Anand)
                                                                                       General Manager (Law & SARD)
                                 
 
Please Note: Kindly send us the details of the all the execution proceedings filed before the
Civil Court on the basis of Lokadalat Decree on or before 08.10.2021.

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