Lok Sabha Question No. 5085 (UNSTARRED), answered on 2022-04-04
Subject: Clubbing of Loans
Ministry: FINANCE
Asked by: Manickam Tagore B

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 5085

ANSWERED ON Monday, April, 4, 2022/Chaitra 14, 1944 (Saka)

## Clubbing of Loans

## 5085. SHRI MANICKAM TAGORE B:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  clubbing  of  two  secured  loans  is  permissible  under  SARFAESI  Act, 2002, if so, the conditions under which it is permissible;
- (b) whether the SBI Suraksha loan amount sanctioned with SBI home loan amount is unsecured loan, if so, the details thereof;
- (c) whether the amount sanctioned under SBI Suraksha loan product is covered by equitable mortgage or by extension of equitable mortgage, if so, the details thereof;
- (d) whether SBI invokes SARFAESI Act, 2002 when SBI home loan account is not classified  as  non-performing  asset,  but  associated  SBI  Suraksha  loan  count  is classified as NPA, if so, the details thereof; and
- (e)  whether  SBI  invokes  SARFAESI  Act,  2002  when  SBI  home  loan  account  is classified as non-performing asset, but associated SBI Suraksha loan count is not classified as NPA, if so, the details thereof?

## ANSWER

The Minister of State in the Ministry of Finance (Dr. Bhagwat Karad)

- (a)  As  per  para  4.2.7.1  of  RBI  Master  Circular  -  Prudential  norms  on  Income Recognition,  Asset  Classification  and  Provisioning  pertaining  to  Advances  dated 1.10.2021, all the facilities granted by a bank to a borrower and investment in all the securities issued by the borrower will have to be treated as Non-Performing Asset (NPA)/Non-Performing Investment (NPI) and not the particular facility/investment or part thereof which has become irregular.

The  Securitisation  and  Reconstruction  of  Financial  Assets  and  Enforcement  of Security Interest (SARFAESI)  Act,  2002,  interalia  contains  the provisions for enforcement  of  security  interest  once  the  account  is  classified  as  NPA  by  the Secured Creditor.

- (b) As informed by State Bank of India (SBI), SBI Suraksha loan is unsecured loan w.e.f.  February, 2018. SBI has further informed that extension of mortgage on the

residential  property  financed  by  Bank  is  not  mandatory  to  cover  Suraksha  Loan. However, SBI has intimated that a suitable clause of general lien over the property has been incorporated in agreement for Suraksha loan. (c) As per information received from State Bank of India, the loans sanctioned under SBI  Suraksha  loan  products  from  February,  2018  are  not  covered  by  equitable mortgage.  SBI  has  further  informed  that  the  Suraksha  loans  sanctioned  prior  to February, 2018 were covered under extension of mortgage of Housing Loan property. (d)  State  Bank  of  India  has  informed  that  all  accounts  under  the  same  Customer Information  File  (CIF)  are  classified  as  NPA,  if  any  of  the  individual  accounts becomes NPA and SARFAESI action is invoked in the account which has security. (e)  State  Bank  of  India  has  intimated  that  when  the  SBI  Home  loan  account  is all  loan  accounts  under  same  Customer Information File (CIF) are classified as Non-Performing Asset as per RBI guidelines. However, SARFAESI Action is initiated only in account which has security, as per

classified as non-performing asset, the reply received from SBI.

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