Lien

Bank usually adopts this under "banker's lien and right to set off" and claims customer owed money to bank in one account which was not paid, and bank followed and exhausted all options to recover the money but customer did not pay. Thereafter bank adopted this resort to collect dues.

Kindly check if you were supplied any communication, telephonic, in person, by letter and then by notice by bank. Kindly check, in the copies of loan application and CC application, if the bank, has mentioned about "banker's lien and right to set off", in terms and conditions, and if the consent was ever given by customer.

As the customer has expired you need to inform the bank about the class 1 legal heir and legal heir should collect the gold ornaments since loan is cleared and nothing is balance on loan a/c. Since the loan a/c is cleared you should contest the lien created by bank, as per legal advice based on documents.

For other dues bank should follow the procedure set as per law of the land.

Bank is expected to supply a notice under acknowledgment, before initiating recovery process which may include calls-visit by recovery collection agents, notices, lawyer's notice for summary suit etc and also notice before creating lien. However the notice to create lien from legal cell of the bank is usually received after the lien has already been created.

The Bank Manager of the branch which passed loan shall dispose the matter by stating lien was created by HO. Kindly take up the matter with bank in writing under acknowledgment, and ask the bank to supply all details in writing along with certified copy of all documents, based on which lien was created. Some of the banks have credit card divisions and some credit card companies as subsidiaries e.g. SBI has SBI cards. If these are two different companies lien is not created.

If Branch Manager does not respond efficiently, you may escalate to Nodal officer. Appellate authority and if they delay escalate to MD/Chairman, with a copy to RBI.

After having all relevant documents you can contest the matter as deemed fit. The bank charges very heavy penalties, interest, in CC accounts, although bank does not obtain customer’s consent for the charges. You may seek legal advice based on documents and your lawyer shall help you with legal remedy.

dear kumarji,

thanks a lot for your valuble suggestion on lien. i will check with lawyer for best available solution.