K’taka HC instructs revision of loan criteria while hearing BR Shetty’s appeal

Bengaluru: Hearing a petition filed by NRI industrialist BR Shetty, the High Court here instructed RBI that necessary measures must be taken to ensure that loans are disbursed only after being provided with adequate security.

Shetty in his petition had questioned the exit control imposed on him due to the Look-Out Circulars issued by the Bank of Baroda (BOB) and Punjab National Bank (PNB) against him.

Both the banks have collectively lent Rs 2,800 crores to Shetty.

The advocates of the banks had argued that the loans were issued to Shetty as his companies were listed in London Stock Exchange and had shares with high net worth.

The Court further noted that it is a matter of great concern for the country’s economy if banks provide such huge sum of loans for businesses that operate abroad.

On Shetty’s petition, the court stated that all Indian citizens have the right to travel but the petitioner is first obliged to repay the debt he owes. Adding that he is at liberty to approach the banks and request them to reconsider the Look-Out Circulars.