Boom in the real estate sector has helped the Punjab Financial Corporation which has been in the red for more than a decade now recover outstanding loans with ease. Of the four one-time settlement schemes (OTS) initiated by the government in the last 10 years,the one that was announced in 2009 and extended till February this year has seen the maximum recovery. Notably,the corporation had stopped giving loans in 2000,and since then it has been only recovering dues. According to sources,some of the sticky units,from which the state had lost all hopes of recovery,had also lined up for the scheme this time. Corporation MD Dr Arvinder Singh says that in some cases,the realty boom has propelled even the guarantors to repay,as the price of their attached property is much higher than the loan amount. The corporation releases the attached land after getting 30 per cent of the amount. People who had pledged their agricultural land are coming forward as well,as farmland prices have also sky-rocketed. Besides,as residential property prices are on a constant upswing,many industrial and farmland owners are applying for change of land use (CLU) and making good use of their properties,adds Singh. Asserting that the trend has spelled good news for the corporation,he says: Another reason for the good response is that this OTS was announced after a long gap and has been there for a longer duration. Besides,some of the dead industrial unit are chalking out revival plans,which has also helped the corporation,he adds. A PFC officer tells The Indian Express that after discontinuing loaning facility in 2000,the state government had announced an OTS in 2001,which was extended till 2002. Thereafter,a scheme was announced in 2003 that was valid till 2005. In 2006,OTS was announced for only those units whose properties were attached. Then in 2009,the scheme was launched and it continued till February 2011. In 2001,the corporation was able to recover Rs 17.81 crore the figure soared to Rs 70.63 crore during the 2003 OTS. But for the 2009 scheme,so far,Rs 77.25 crore have been recovered from 400 cases that have been settled,though 465 units had applied. The officer says that from the rest of the 65 units,which are under consideration,Rs 12 crore is likely to be recovered. This will take the amount to about Rs 90 crore. Listing flaws in the OTS,sources say the scheme is defaulter-friendly. It sets a wrong precedent. Even those who were earlier paying their dues regularly had discontinued it. They have started waiting for the announcement for OTS,which has no provision for penalty, said a source. About the reasons for the corporation suffering losses,sources say that it was set up to finance new units,where mortality rate is high. Besides,the high rate of interest was also a deterrent.
