FIs harassing borrowers under Draconian Act

HYDERABAD: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act-2002 (SARFAESI) needs to be amended in tune with home loan borrowers’ demands, Credit Card Holders Association of India  general secretary CV Giddappa has said.Speaking at a press conference conducted by Pragathi Social Service here on Saturday, he said that as per the provisions of the SARFAESI Act, if a home loan borrower fails to pay the Equated Monthly Instalment (EMI) by any means for three months, he or she will be given warning notices every month. If payment is not made for the fourth month also, then the property will be taken over by the lending financial institution and auctioned.“In this process there is no space for the borrower to express his or her grievance. The Act is not only draconian but also infringes on the fundamental rights guaranteed under the Constitution. It is not good either for the borrower or the financial institution.’’ Demanding amendment to the SARFAESI Act and an end to acts of harassment of home loan borrowers by financial institutions, the CCHAI would submit a memorandum to governor ESL Narasimhan, he said.Giddappa said some of the borrowers were going into depression and some were even committing suicide when they were unable to deal with financial institutions. “Tenants under the leasehold are thrown out under the Section 14 of the SARFAESI Act without giving any opportunity to borrowers and by just giving them a notice under Section 13 of the Act. This is resulting in miscarriage of justice and abuse of law,’’ he said and announced that CCHAI would organise meetings and seminars across the country to create awareness in people.