MUMBAI, Aug 3 (PTI): Noted art director Nitin Desai, who is suspected to have committed suicide at his studio near here, had approached MSC Bank for a loan recently, its chairman V V Anaskar said on Wednesday.
Anaskar said lenders should not be driven merely by the underlying security and should look at business prospects as well while taking a call on a loan proposal.
Adhering to a practice like this can help avoid eventualities like the one which has happened now, where a distressed borrower takes a drastic step, Anaskar said, without specifying when was the bank approached for a loan by Desai or the overall quantum sought.
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It can be noted that the company of Desai, who was found dead at his studio near Karjat, had defaulted on a Rs 252 crore loan repayment to creditors and the Mumbai bench of the National Company Law Tribunal had initiated insolvency proceedings against the company.
Cash flows are very important while taking a call on a loan proposal and the same should have had looked into.
There is also a need to relook at the way a stressed borrower is treated, Anaskar said.
According to him, rather than seizing possession of a property given as a security, such borrowers should be declared sick and efforts must be made to revive the business and payoff the creditors.
