Loan Default : When a consumer's loan defaults, that is, if the loan is not repaid, the bank starts taking various actions including giving notice. During this action of the bank, the loan takers have many rights, but due to lack of information, they are unable to use these rights (loan defaulter's rights) and are forced to bear the pressure. Therefore, in such cases, you need to know the rules of loan recovery and your rights, so that you can take appropriate steps.

The bank takes this action -

Before a loan default, the bank informs the customer about this default and proposes to extend the time for a loan or EMI payment (loan EMI rules). If even then the loan is not paid by the borrower, then the bank can send a notice (Rules for loan defaulter) and file a case in court. After this, actions like the sale of property or deduction from salary can be taken. During this time, the consumer also has some rights (borrower's rights), about which the loan creditor should be aware.

Recovery agents cannot take these steps -

In case of non-payment of a loan, the bank can legally start the recovery process. For this, it can take the help of some special agents, but these agents do not have the right to threaten or put pressure on the loan creditor in any way. If the customer does not pay, then these recovery agents (recovery agent ke liye rules) can contact them, but this entire process is done under the law. Agents are not allowed to put any kind of physical or mental pressure.

Bank cannot take action without notice -

Banks and financial institutions need to adopt the right method for recovery of their loans (loan recovery rules). When a person has kept the property as a guarantee, then the bank can legally seize it if the loan is not repaid. However, before doing this, it is necessary to inform the loan takers. The bank does not have the right to take action without informing the customer. There is a special law Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, which allows borrowers to legally seize the mortgaged property, but it also has some rights.

Customers have the right to complain -

When a person is unable to repay the loan and the recovery agent (rules for loan recovery agent) goes to the customer's house, he should go within the stipulated time, which is from 7 am to 7 pm. If the agent misbehaves with the customer, the customer can inform the bank about it. If the bank does not hear this matter, the customer can complain to the Banking Ombudsman. This can help the customer, and his rights will be protected.

These are the legal rights of the loan taker -

1. When the loan is not repaid, the bank can legally take the mortgaged property, but it is necessary to inform the customer first. If the lender does not pay for 90 days, the account is put in the category of an NPA account i.e. dormant account. In this situation, the lender has to give a 60-day notice to the defaulter (Loan defaulter's rights). Before this, it is necessary to inform the customer about any action, so that he has time to resolve the matter.

2. If the bank considers you a defaulter (Loan default kab hota hai), it does not mean that your rights end or you become a criminal. The bank has to adopt a fair method to recover your dues. Before it takes possession of your property, you are given a reasonable time to repay the loan (loan repayment rules). Its purpose is to give you a chance to improve your situation so that any disagreement can be resolved.

3. If the borrower does not pay during the notice period, the bank can start the process of selling the property. But, for this, the bank must issue a 30-day public notice (Public notice to loan defaulters). Information and details of the sale of the property are given in this notice. Its purpose is to give more time to the borrower and to make the process of sale transparent to the public.

4. Before the sale of the property, the bank or financial institution has to issue a notice stating the correct value of that property. In this notice, it is necessary to mention the reserve price, (Reserve price for loan defaulter), date of sale, and time of auction. Its purpose is to ensure that the property is sold at a fair price and the process remains completely transparent.

5. If the property of the loan defaulter is taken into possession after the loan default, then it is necessary to keep an eye on the auction process (E-auction process in loan default). After recovery of the loan, if any extra amount remains, then the creditor has full right over it. If the creditor applies for this amount in the bank, then the bank has to return this extra amount to him.

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