RBI issued orders for non-payment of loans
If you also pay a loan, then reading this news is very important for you. Actually RBI has issued orders for those who do not pay the loan. Let us know the latest updates related to RBI in the news below.
Necessary to follow proper procedure
Losing your hard earned asset hurts a lot. However, one should be prepared for this in times of recession. Anyone can face this situation due to business failure or loss of job. Remember that even if the creditor defaults on the payment of the loan, he does not lose all rights over the asset. He has every right to get humane treatment. For the recovery of your loan, it is necessary for the lenders (banks, financial institutions etc.) to adopt proper procedure. In case of secured loans, they have the right to legally seize the pledged asset. However, banks cannot do this without giving notice. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act empowers the lenders to seize the pledged assets. Come, let us know what rights people have got in such a case.
It is necessary to give notice
The borrower’s account is classified as a non-performing asset (NPA) when he does not pay the installment to the bank for 90 days. In such a case, the lender has to issue a notice of 60 days to the defaulter. Banking consultant and former credit counselor V.N. Kulkarni says, “If the borrower fails to make the payment within the notice period, the bank can proceed with the sale of the asset. However, the bank has to issue a public notice of 30 more days to sell the asset. Details have to be given.”
Right to get the fair value of the asset
Before selling the asset, the bank/financial institution has to issue a notice stating the fair value of the asset. It also needs to mention the reserve price, date and time of the auction. Gaurav Chopra, MD & CEO, IndiaLends, says, “The fair value is ascertained by the bank’s valuer. If the borrower feels that the asset is undervalued, he can challenge the auction.” In this case the borrower has the right to find a new buyer. He can introduce the new buyer to the bank.
Right to receive money due
Even if the asset is taken into possession, the auction process should be monitored. The creditor has the right to get the additional amount left after the recovery of the loan. The bank will have to return it.
Bullying or coercion is not allowed
Lenders can take the services of recovery agents to recover their loans. But, they cannot cross their limits. Such third party agents can meet the customer. But, they do not have the right to threaten or coerce the customers. They can visit the customer’s home between 7 am to 7 pm. However, they cannot misbehave with the customers. If such misbehavior occurs, the customer can complain about it to the bank. If there is no hearing from the bank, the door of the Banking Ombudsman can be approached.
