Can bank declare an account of a person npa if his other a/c in the same becomes npa?
K.K.Ganguly
(Querist) 11 December 2011
This query is : Resolved
Will the Ld.Experts kindly opine?
One of my client's A/C have become NPA. The Bank has issued notice u/s 13(2)not only for that a/c but for another a/c of the client also in the same branch. The Bank is saying that as per RBI guidelines if one a/c becomes NPA, all other a/cs will be treated as NPA.
Is this version about RBI Guidelines correct?
Raj Kumar Makkad
(Expert) 11 December 2011
Matter is not to declare any notification as genuine or bad rather it is a fact that RBI has issued a similar notification to banks and as such you have been treated accordingly.
Advocate. Arunagiri
(Expert) 11 December 2011
Whether the same property was mortgaged for the two different accounts?
vasant kulkarni
(Expert) 11 December 2011
REMEMBER THAT THE NPA CLASSIFICATION ( AS PER RBI INSTRUCTIONS) IS DONE NOT ACCOUNTWISE BUT BORROWERWISE.THAT IS,IF YOU ARE HAVING MORE THAN ONE LOAN ACCOUNT AND ONE LOAN ACCT BECOMES NPA THEN ALL OTHER LOANS ACCTS. ARE TREATED AS NPA,EVEN IF THEY ARE IN ORDER.SIMPLE LOGIC ,IF THE BORRWOER IS NOT ABLE TO PAY ONE LOAN ACCT,HOW HE CAN PAY FOR OTHER LOAN ACCT?
SO PL. KEEP ALL ACCTS. IN ORDER.THE BANK IS PERFECTLY CORRECT IN ISSUING NOTICE.
Raj Kumar Makkad
(Expert) 11 December 2011
You study this master circular of RBI:
RBI/2010-11/45
UBD.PCB.MC.No.3/09.14.000/2010-11
Guest
(Expert) 12 December 2011
Perfect views by A/Shri Vasant Kulkarni and Raj Kumar Makkad, as per the RBI guidelines. Moreover, everyone prefers to adopt simple, painless and hassle-free process, so the banks also try to adopt the same process instead of taking timely action to properly guide their clients not to get in to trouble laterS
Devajyoti Barman
(Expert) 12 December 2011
Dear Mr Kulkarni, do you have any support of RBI guideline with regard to your reply?
DEFENSE ADVOCATE.-firmaction@g
(Expert) 12 December 2011
Yes Mr Kulkarni is right, even prior to RBI circular even if exists the lenders take agreements in normal course to bind all accounts and deposits.
More draconian provisions are coming in new amendments if passed in current session.
FM has given direction to clear all NPA related cases by March 2012., since the basic problem is money, banks are short of capital.
RAJU O.F.,
(Expert) 12 December 2011
Bank is justified in classifying the other a/c as NPA, if any one a/c of the same borrower, in the same branch, is actually NPA. In the case of consortium advances, involving several bankers to one borrower, individual banks are given freedom to classify their a/c into NPA or not, based on their experience of recovery.
Advocate. Arunagiri
(Expert) 12 December 2011
Even if both the accounts are declared as NPA, the bank can not issue notice u/s 13/2 if the property is not mortgaged for the second account.
K.K.Ganguly
(Querist) 13 December 2011
The properties mortgaged for two over draft accounts are plant and machinery whereas the third a/c is home loan a/c wherein the house has been mortgaged as secured asset. Two over draft a/cs have become NPA for which the plant & machinery of the construction sites have been mortgaged. Can the bank issue notice u/s 13(2) and claim possession of the House which was mortgaged for the home loan a/c wherein there is no default in payment but the Bank has declared that a/c also as NPA for being default in other two over draft a/cs?
Advocate. Arunagiri
(Expert) 13 December 2011
The bank cannot claim possession of the house, as it was mortgaged for the other accounts which became NPA.
