one time settlement scheme of rbi
Guest
(Querist) 20 July 2010
This query is : Resolved
my client is a guarantor to an urban co-operative bank and the borrower is now dead. the bank is under liquidation. the property mortgaged with the said bank is of guarantor and its value is less than Rs. 20 lacs, which was the principal amount of loan.
now since the bank is under liquidation it is seeking to recover the whole amount from my client i.e. guarantor. the guarantor is ready & willing to deposit Rs. 12 to 14 Lacs with the said liquidator and in lieu of it wants to get his mortgaged property released. the liquidator is ready to accept this under the one time settlement scheme of RBI but he has two doubts which are troubling the onset of the said settlement :
1. Whether the one time settlement scheme, if any either of RBI or any other scheme of like kind, is applicable to urban co-operative banks ?
2. Whether the bank or any liquidator is legally permitted to liquidate the account below the principal amount. Is there any legal bar to acceptance of an amount as a full & final settlement of account below the principal amount ?
s.subramanian
(Expert) 20 July 2010
urban co-operative banks are governed by the state governments.however it is open to the board of directors of such co-op banks to waive interest amount and offer one time settlements.there is no legal bar in doing so. but no part of the principal amount of loan can be waived by any authority, if they do so,the authorities responsible for such action would be proceeded against for surcharge under the co-operative socities act for causing loss to the bank.
