No Need for Sarfaesi Act In Nagaland

What is SARFAESI Act 2002 ? The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act. In short if a person takes a loan from the  bank  and cannot pay back the loan, then the bank under SARFAESI ACT can sell the house or the land or any property  which was mortgaged for recovering the loan.

What is the main reason why Nagaland Sate Government and some NGOs like Central Nagaland Tribes council, Business association of Nagaland, Confederation of Nagaland Chamber of Commerce and Industry and many educated unemployed youths want the Nagaland Government to implement SARFASSI ACT in Nagaland? The answer is because they claim that many educated unemployed Nagas and entrepreneurs cannot get loan from the bank because they cannot mortgage their land because SARFEASI Act is not applicable in Nagaland.

Why SARFAESI ACT cannot be applied in Nagaland? Because under Article 371A the land in Nagaland cannot be sold to non Nagas. Therefore the SARFAESI act cannot be implemented in Nagaland.

So the Billion dollar question is, is it really true that there is no way an educated unemployed Naga can get a business loan from the bank without mortgaging ones land or property? Of course not. There is every possible way to get a business loan without mortgaging a single inch of land. Sounds too good to be true right?

This too good to be true scheme is called Credit guarantee Scheme also known as CGTMSE(Guarantee Fund Trust for Micro and Small Enterprises ). In simple Credit guarantee scheme is like buying insurance for your loan. If could not pay back the loan then depending upon the nature of business the credit guarantee scheme would pay up to 85% of the your loan to the Bank.

Under these Credit guarantee scheme cover one can avail Business loan upto 1 Crore without mortgaging any property or grantor. This is available for both new applicant and those who are doing business For more details that may change your perspective toward loan and life kindly visit www.cgtmse.in.

We must know that there are thousands of educated unemployed youths all over India who don’t even have land for mortgaging nor do they have any property for availing business loan. This is the reason why the Government of Indian created the Guarantee Fund Trust for Micro and Small Enterprises(CGTMSE). To help thousands of educated unemployed and entrepreneurs all over India to avail loan without any collateral where no land or property or grantor is required to avail business. So you see there is a solution to the problem. Even better Under CGTMSE there is special provision for SC/ST of North eastern States of India.

It is true that not every educated unemployed Nagas in Nagaland is going around in search of business loan of 1 Crore rupees from the bank. Some are just in need of few thousands or Lakhs. Therefore let’s divide the educated unemployed Nagas and entrepreneurs in Nagaland into two groups:-

•  Those who want to avail higher amount say from 25 Lakhs to Rs 2 Crore:

They can approach the bank with a good loan project and request the bank through an application for loan under credit guarantee Scheme. They can reffer and use CGTMSE Circular no 36/2007-08 dated 02^nd July 2007 and CGTMSE Circular no 50/2008-09 Dated 07^th January 2009 for availing business loan upto 1 crore without any mortgage or any collateral.

• Those who want small loans from 10,000 to 10 Lakhs.

They can approach the bank with a good loan project and use  Reserve Bank of India MASTER Circular NO RPCD.SME & NFS. BC.No. 79 /06.02.31/2009-10 dated May 6, 2010 for availing loans upto Rs 10 Lakhs without mortgaging any land or property.

So we can clearly see that there is no need for the educated unemployed Nagas in Nagaland or the entrepreneur to mortgage their land or need to Enforce SARFAESI Act in Nagaland for availing either small or huge loan. The problem is the bank officials don’t guide those who come for business loan on Credit Guarantee scheme. The problem is with our educated unemployed Nagas in Nagaland. The problem is they are educated but uninformed and unprepared.

• They go to the bank without any or proper study of the loan schemes available from the bank.
• They go to the bank without proper loan project, and
• They go and talk with the bank managers for loan they do not give anything in writing. Which is why they don’t have any proof to show that the loan they applied for was denied or rejected.
• They never write about their grievance in regard to loan to the Reserve Bank of India Bank ombudsman in Guwahati. The address is available in www.rbi.org.in

For those who have taken huge loans and are having trouble due to Covid -19 pandemic can check out Emergency Credit Line Guarantee Scheme. It offers remedies for business loans gone bad during Covid-19 pandemic and has outstanding debt of Rs. 25 Crore or less as on 29^th Feb 2020.Check out www.ncgtc.in for more details.

The Nagaland State government instead of making aware of such excellent schemes like the credit guarantee scheme and Emergency Credit Line Guarantee Scheme is working hard to make way for SARFAESI Act in Nagaland so that we can take loan by mortgaging of land. How is it that the Nagaland finance department not aware of credit guarantee scheme?  If they know then why are they acting so ignorant?

When there is strict standing orders and circulars from the Reserve Bank of India and  Guarantee Fund Trust for Micro and Small Enterprises  Credit insisting to give out loans without taking any collateral, the bank loan managers insists on collateral and grantor, throwing SARFAESI Act on the face of the Unemployed Nagas in Nagaland and sending them away all hopeless. This is a crime in itself. Any bank officers found guilty of such crime of denying customers such wonderful schemes must be punished as per the law. If need be a Public interest litigation can be filed in the interest of all educated unemployed youths in Nagaland.

Just imagine how many Nagas in the past have taken loan from the Bank by mortgaging their land because the concern loan officer did not guide the customer to take the Loan under credit guarantee scheme? Imagine how many brilliant business ideas must have been denied because they could not mortgage their land? Is this not crime in itself?

So it is very clear that Nagaland do not need the SARFAESI Act. The problem is not Article 371A or none implementing of SARFAESI Act. The problem is uniformed and unprepared educated unemployed Nagas who don’t know about such existing schemes as credit guarantee scheme. Who don’t do proper homework when it comes to business loan maters, therefore are hopeless and helpless? Other problem is the State Government which seems to have no idea of such schemes either and the bank officials who are misleading the customer by saying can’t give loan because cannot mortgage land.

So since we know the truth, instead of implementing the SARFAESI act in Nagaland the NGO’s and educated unemployed Nagas in Nagaland must insist that Nagaland Legislative assembly pass an Act called the “Nagaland credit guarantee enforcement act for unemployed Nagas and entrepreneurs of Nagaland” in line with the provisions of central Government schemes.  This would greatly help the unemployed Nagas to avail business loan under Credit guarantee without mortgaging of land or any collateral. Provision in this act must be made to punish the erring bank and financial corporation’s officials in Nagaland who misguide and keep information from the customers on credit guarantee schemes and insist on mortgaging of property for loans.

Imlisanen Phom