Rs 4000 Crore Loan Problem Hits the Kutchi-Visa-Oswal Community
The Kutchi-Visa-Oswal community has borrowers default on loans worth Rs 4000 Cr.
The Kutchi-Visa-Oswal are one of Mumbai’s richest communities. For years this community has financially helped out people who needed capital for their business. These loans were given without any documentation or guarantee. The borrowers have now defaulted on the payback of their loans worth upto Rs 4000 Cr
On 5 December, members of the community gathered at the Dadar Kutchi hall to discuss this problem. The community has decided to not allow these members to attend community events, weddings and also to remove them temple trusts. What has hurt them the most is that they continue to live a lavish lifestyle but have not paid back the loans.
These loans were given at an interest rate of 12-15%. Many families ran their households on the income based of the interest. Since the borrowers have defaulted on their payments, the lenders are finding it very difficult to meet their daily expenses. They are 15-20 people who have to pay back more than Rs. 200 Cr to the community. They include owners of restaurant chain, distributors of pulses, a papad manufacturer, a lottery operator, etc.
Another reason for this problem is that, the brokers charged very high interest rate. Which was why many defaulted on their payments.No legal action can be taken because all the transactions were carried out in cash.
A senior community member said that this problem will be solved within the community. The elders will put pressure on the people to pay the loan back. They have also advised the lenders to invest safely and carry out proper research before giving money to anyone.
