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PSPCL to Seize Salaries, Pensions Over Loan Defaults at Cooperative Bank


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A startling discovery reveals 844 Punjab State Power Corporation Limited (PSPCL) employees on the defaulter list of Punjab State Cooperative Bank Limited. The total loan default amount stands at a staggering ₹9.44 crore, accumulated over years across various bank branches in the state.

Armed with the state-provided list, PSPCL administration has issued notices to these employees for neglecting loan repayments. The loans were primarily for personal uses, home construction, and renovations.

Taking decisive action, PSPCL on December 22nd empowered all officers controlling finances to deduct outstanding loan amounts from the salaries, retirement dues, and pensions of these employees, acting on requests from the cooperative banks.

An official explains the root cause: many employees borrowed from banks near their initial postings, but after transfers, failed to maintain repayments. They attribute this to relocation challenges.

“This is a serious matter,” the official emphasized. “We’ve instructed all finance officers to ensure recovery. Many defaulters have retired, some are even abroad.”

The issue gained momentum on October 18th when Anurag Aggarwal, Special Chief Secretary, addressed the Department of Power in a letter. He highlighted an “irrevocable authority” granted by these employees to PSPCL, authorizing deduction of loan instalments from their salaries at the time of taking the loans.

This authority stems from Section 39 of the Punjab Cooperative Societies Act, allowing banks to recover unpaid sums from the employer as “arrears of land revenue” if deductions fail to occur.

However, further communication between the Director Treasury & Accounts and other departments revealed additional hurdles. Banks needed prior approvals from the Department of Finance and Personnel for deductions from salaries and benefits.

“Legal counsel also reaffirmed the need for administrative intervention,” the official added. “The government directed PSPCL to issue guidelines, instructing department drawing and disbursing officers (DDOs) to deduct pending instalments, prompting the power department’s action.”

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