PNB faces SC ire for lapses in loan auction and settlement

NEW DELHI: The Supreme Court on Wednesday pulled up the Punjab National Bank (PNB) for simultaneously pursuing a debt settlement and an auction of the borrower's property, calling it a "collusion" and urging the bank to take a policy decision "at the earliest" to ensure such episodes are not repeated and appropriate action is taken against erring officials.

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A bench of justices JB Pardiwala and Sandeep Mehta directed the bank to issue a final sale certificate to the auction purchaser within 48 hours and refund the borrower ₹27 lakh from the proceeds, while terming the conduct of the bank "gross" and "a sorry state of affairs." The court added that if such contradictions continued, "the day is not far when these auctions will always fail because they have lost their sanctity." The court's reprimand came a day after it had summoned PNB's chairman-cum-managing director (CMD), who remained present during Wednesday's proceeding