Credit card outstanding
SABIR AHMED
(Querist) 23 December 2015
This query is : Resolved
Dear Expert,
Could a particular bank attach/recover money legally from the saving account balance
held in any of the branch of the Bank for visa/Mastercard credit card outstanding of any other different issuing Bank?
Regards
Sabir
Kumar Doab
(Expert) 23 December 2015
Apparently NO, until there is an order by court.
Post full details or consult your local lawyer.
SAINATH DEVALLA
(Expert) 24 December 2015
GO THROUGH THIS ARTICLE
LOAN AND CREDIT CARD DEFAULTS:BANKS CAN PUT A LIEN ON UR ACCOUNT:
Did you know that banks can hold your money hostage? Well, they can, and the ransom you have to pay to get your money back: clear all outstanding dues. Banks have devised a clever way of ensuring that customers clear credit card dues and repay loans on time. If you default for several months, the bank can deduct money from your savings accounts or refuse to pay money from the fixed deposit when it matures.
No, banks aren't trying to con you. What they are doing is perfectly legal. In fact, they have your permission to do so. You don't remember giving it, do you? But you did when you signed on the dotted line while availing of the loan or the credit card and accepted the terms and conditions (T&C).
The fine print will have a statement similar to this: "I hereby grant and confirm the existence of the right of lien and set-off with the Bank, which it may use anytime to utilise any money belonging to me and deposited with the bank, towards any outstanding dues".
All this legalese simply means that the bank has the right to deduct money from your account. "Any collateral that the bank can legitimately hold can be held back. Even FDs can be used," says Harsh Roongta, CEO, Apnapaisa.com. Of course, if your T&C does not state this, the bank cannot touch your money.
Says Kishori Udeshi, chairman of the Banking Codes and Standards Board of India that lays down the code of conduct for bankers: "Banks can't debit unless you agreed that such measure can be taken while taking a loan. However, if you have signed on the loan contract and it mentions that the assets can be adjusted, then they can."
So, if you aren't careful about clearing all your dues with the bank, you might find yourself bankrupt, literally, as Ashish Jha (name changed) discovered last year. For the Mumbai-based script writer, 2010 began with a financial blow. He had outstanding dues of Rs 90,000 on his credit card and had lost his job.
In April, he asked a friend to lend him some money, who transferred it to Jha's account. When Jha went to withdraw the money, he found that the bank had deducted the whole amount as payment towards the credit card dues. A few months later, Jha deposited a cheque of Rs 35,000 in the bank that he received as payment for writing assignments. This too was appropriated by the bank.
If you think you can avoid such a situation by opening a second account, you still won't be able to get away. You can't default on one account and get away by keeping to the straight and narrow on the other. Take the case of Sumit Shah (name changed), who had taken a loan against gold from Canara Bank.
Even when he repaid the entire loan, he could not get the jewellery back as he was defaulting on a different loan that he had taken from another branch of the bank. Similarly, Charan Singh Guha too had to lose out on his savings. When Punjab National Bank withdrew money from his account, the banking ombudsman upheld the bank's right to do so as Guha was the guarantor of a loan that had not been repaid by the borrower.
Rajendra K Goyal
(Expert) 24 December 2015
Bankers have right of general lien on the accounts of the borrower and it can appropriate its dues towards credit accounts of the borrower with same or any other Branch of the Bank.
Kumar Doab
(Expert) 24 December 2015
You have posted that:
"Could a particular bank attach/recover money legally from the saving account balance
held in any of the branch of the Bank for visa/Mastercard credit card outstanding of any other different issuing Bank?"
The meaning gathered from your post is that CC is issued by some bank and SB a/c is maintained in some other bank.................
What is the relationship between Bank where a/c is maintained and bank that has issued CC?
You have not clarified it.
Until or unless you have signed some agreement that for CC issued by bank 1, the bank 2 has the right to mark lien and set off......................how can another bank mark lien and set off?
You alone need to post full facts.
Devajyoti Barman
(Expert) 25 December 2015
Agree with Doab.
If the borrower has bank a/c in the same bank which issued the credit card then only the bank can attach his savings to recover the outstanding amount.
K.S.Srinivas
(Expert) 29 December 2015
In case credit card issued and he savings back account are different banks, then it may not be possible.
T. Kalaiselvan, Advocate
(Expert) 03 January 2016
The article reproduced by expert Mr. Sainath Devalla is self explaining. The author may understand the concept.
