People have to resort to loans when they need money in an emergency. Many banks and companies provide loans at certain interest rates. If a person is unable to pay the EMI of his home loan or personal loan and defaults, then it is not so, what will happen? You might be thinking that if you do this, the bank or the loan-giving company will harass you. but it's not like that. Experts say that the bank cannot threaten or use force to not repay the loan. Let us explain in detail.
Banks cannot threaten or force customers
Let us tell you that the bank cannot threaten or use force to not repay the loan. However, the bank can take the services of recovery agents for this work. But even these agents cannot cross their limits. If a customer is not paying the money to the bank, then third-party agents can definitely be contacted. But they can never threaten or force the customer. Legally they do not have this right.
Banks cannot recover loans without notice
To recover your loan, it is necessary for the loan-giving banks and companies to adopt a valid process. In the case of a secured loan, they have the right to legally seize the mortgaged asset. However, banks cannot do this without giving notice. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act empowers lenders to seize the mortgaged assets. Let us know what rights people have in such a case.
Customers can complain to the bank
Even if the agent goes to meet the customer, he cannot go to his house at any time. The agent can go to the customer's home only between 7 a.m. to 7 pm. If the agent misbehaves at home, the customer can complain to the bank. If the bank does not listen then the customer can approach the Banking Ombudsman.
These are legal rights
The bank can legally seize the mortgaged asset to recover the loan. However, they have to give notice to the customer before this. The creditor's account is declared a non-performing asset (NPA) when he does not pay the installments to the bank for 90 days. In such a case, the lender has to issue a notice of 60 days to the defaulter.
If the bank declares you a defaulter, it does not mean that your rights are taken away or you become a criminal. Banks have to follow a prescribed process and give you time to repay the loan before taking possession of your property to recover your outstanding amount.
The creditor's account is declared a non-performing asset (NPA) when he does not pay the installments to the bank for 90 days. In such a case, the lender has to issue a notice of 60 days to the defaulter.
If the borrower is unable to make payment within the notice period, the bank can proceed to sell the asset. However, for the sale of the asset the bank has to issue a public notice of 30 more days. In this, information about the details of the sale has to be given.
Right to get the fair value of the asset: Before the sale of the asset, the bank/financial institution has to issue a notice stating the fair value of the asset. In this, the reserve price, date and time of the auction also need to be mentioned.
Even if the asset is taken into possession, the auction process should be monitored. The creditor has the right to receive the additional amount left after recovery of the loan. If you apply for this in the bank then the bank will have to return it.
