PNB issues loan recovery guidelines after apex court rap

Under fire from the Supreme Court over what it termed “gross” misconduct and “collusion” in loan recovery proceedings, the Punjab National Bank (PNB) has now barred its branches and zonal offices from directly approaching high courts in matters under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act.

- Utkarsh Anand

The bank has also advised for the withdrawal of all writ petitions already pending before high courts across the country in such cases.

The instructions, recorded in an affidavit placed before a bench of justices JB Pardiwala and KV Viswanathan, mark a direct fallout of the apex court's strong rebuke last month when it pulled up the bank for simultaneously pursuing a Lok Adalat settlement with a borrower even as it had already auctioned off the borrower's property.

The court, in a series of hearings, described the episode as a “sorry state of affairs” and pressed PNB’s top brass to take corrective policy measures at the earliest.