Legal action can govt. banks take on default education loan

Wilful defaulter means who is having capacity and source  for repayment of the loan, but intentionally avoids payment of the loan.

(But I have my own doubts in the query, as some  banks mandatorily provide for life insurance for beneficiary as well to guardian (father or mother) to cover their loan and not to burden the dependents already under distress in repayment of the loan.  Both for Housing loans and educational loans, several Banks prescribed life insurance)

Death of her father when borrower was four years old, is no valid ground for raising educational loan decades thereafter and then defaulting.  (Reasons may be genuine but money involved is Public money)

The word willfully when used in the definition of a crime, it has been said time and again, means only intentionally or purposely as distinguished from accidentally.  WHEREAS default means neglectful, to fail to perform a contractual obligation.

Sir,

Thanks for ur replies. Banks declare the unrecoverable loan as NPA and file a civil suit saying that the borrower is "WILFUL-DEFAULTER" and obtain the decree.

Precisely, There is no intention to not to pay the loan or disown the liabiluity the only question is unemployment. Bank orally acceptas the genuiness but says the rule is such we have to file the recovery suit within stipulated time. Bank also suggests to plead for decree enfoerceable after say 5 years.

The question is how can bank catagorise a borrower as willful defaulter when he is willing to pay but is unable to pay due to enforcing circumstances.

sofar as housing loan is concerned, insurence provision do exists but for education loan I am not sure.

Reference to deceased father was only to indicate there is no property etc and hence the grand father and maternal uncle stood guarantor

Pl advice

s.d.kahaley

 

 

When the loan is guaranteed by others, Bank can as well make them as necessary parties and recover from them through decrees.

(These thinking that how we can repay the loan in case of unemployment must come before raising the loan both by borrower and guarantors.  A bank is not bothered as to default is wilful or not, the amount is in default and it can recover legally as per documents executed.  Please remove assumptions from your mind that Courts can order for recovery only in case of wilful defaulters alone..  The amount is in default and it belongs to Public and it has to be recovered either from borrowr or from guarantors.  That is it.)

Dear Sir/Madam,

Today is my 1st day in this forum. I have been provided with an education loan from State bank of india on 2009 for studying in an Institute. The institute falsely claimed to be UGC approved. 

The loan has been taken by me with my father standing as an guarantor(no mortgage has been provided and my father is a govt. employee)

My question is can a bank provide us(the students) an education loan though the instituition is a fraud one?

We( a group of students who had studied from that fraud instituition) have filed case against the instituition. The case is in progress.

Initially I use to repay the amount to the bank. On 2010 I wrote a letter seeking for some support from Bank end regarding our case as few PSU banks already provided their lawyer for the same. My letter was not been answered.

Please note inspite of all these I didn't stop repayment till 2013. From 2013 April(most probably) onwards I stop my repayment. On 2015 they called me to their office and started the conversation in an threatning tone. He told me their bank will ruin my carrier by putting my name in CIBIL and no mnc will take me to job. Further my father's job will also get effected. I tried to submit a letter seeking clarification regarding the providance of loan against a non-recognized institute. On refusal of the acceptance of the letter I mailed the same to sbi branch and zonal office and also send the hard copy with registrad ad. Few days after this incident they started giving me threatning call which I again informed to the bank over the mail id.

Now please suggest what will be my action prior to that please provide me with the clarification regarding the question I have asked in bold letter.

Seeking your revert.

Your argument against Bank is not proper.  It is the student that has to choose suitable instituttion that has recognition and reputed.  If he fails to do reasonable inquiries, he can not blame the bank, as bank has to see the purpose and the borrower while advancing the amount.

Reporting to CIBIL is a necessary formality and it is not a threat.  It is the duty of the Bank.

Why should Bank respond to a matter they are unconnected with as you have chosen and directed the Bank . Bank is not supposed to provide any information on unrelated issue and offer you explanation for your student in such reputed institution.  "Caveat emptor' (Let the buyer beware) is old maxim either for purchase of vegetables or education.

You can never blame your negligence and show it a proper reason for default with the Bank.  Bank Manager has not sanctioned the loan out of his pocket and it is Public Money.  It is his duty to report it to CIBIL, and due to these invented tactics for default, other deserving students receive the punishment of not getting finance from Banks.

Act like a responsible citizen and pay the amount you have borrowed to the Bank.

1. Do not waste your time and energy in trying to establish that it is the Bank's primary responsibility to verify about the genuineness of the Project, Institution etc brfore providing loan,

 

2. It is the sole responsibility of the Borrower to ascertain where he is is spending the borrowed money and also it is his responsibility to repay the loan he had availed from the Bank,

 

3. Bank will certainly post the status of the loan account to CIBIL so that the defaulting borrower can not avail similar loan from other Banks and finally pass on the blame to the other Banks also for his inability to repay the loan citing some reson or other,

 

4. If the lending Bank waives repayment of such loan then all the Bank's coffers of public money will be empty within no time.

Dear Sir, thank you for your valuable suggestion. I have no intention of putting a tag of defaulter in my status . Need a bit further clarification since you said its students sole respnsibility to check out the genuinity of the institution. Sir can a bank provide such loan to the students who are applying for a non recognized or non certified institution? Please note in my scenario the cheque from the bank had been directly handed over to the insituition and not to us(just an information thought might be needed for clarification).

Hi all,

i have taken an education loan around 2.5 lakh rupees and the emi started from last july as the moratorium period ended on june.But i dont have a good job to repay the emi.Our family income is less than 2 lakhs per year and i am getting a salary in which i cant save for emi.  Two days back the bank officer called and abused me and threatened to senda notice to my home within 5 days.we have given our patta xerox and a lic bond as co-lateral security.he also called my parents twice.

i want to know what actions bank can take against me and my father as he is the joint account holder? Is it not a type of human rights violation to talk us like animals?

 

thnks,

haitu

You need no advise, and you can read all the earlier replies.

When you have borrowed amount from a Bank, Bank has advanced you the amount accepted from the Bank as deposit.  You have to explain your difficulties and some how prioritise to repay EMI as immediately as possible, and you may have to make individual sacrifices

Bank can some how attach your salary and can recover the amount, but your name will be sent to all financial institutions, and you can not get even a credit card or any type of loan like Housing and for vehicle.  The doors of Banks will be permanently shut to the defaulters.

Human beings are having rights and at the same time legal duties also.  Once we forget our duties, we are giving a scope for such violations from others.  Step into their shoes and think, if some one has borrowed some amount, benefitted by your amount, and ignores to repay the amount.  Bank officer is not demanding his individual amount, and demanding public money.  RBI Governor has expressed his grave concern over the defaults of educational loans.  Bank will some how recover the amount to-day or tomorrow either from you or from your father.  Before raising the loan for such education, a prudent person ought to think of repayment, if things do not move favourably.  It is too late and before it becomes precarious, negotiate and explain difficulties with the bank officials and start paying EMI and improve your credit rating in your own interest.  Remember the proverb "ingratitude is stronger than traitor's arms'.  Think positively and in a cool mood.

Dear Sir,

As i have already shared my issues regarding education loan. I had taken loan from PNB bank in 2007.I belong to a poor family.On behalf of my good academic record and merit,bank approved an unsecured loan of 4 Lac .My father was the only source of income in my family.After completion of my engineering,I went through recession and couldn't get a job.After 6 months of completion of my education,I started a job with RS 4000/- salary in 2010 .By the time my father fell sick and expired.I couldn't pay the loan till now .In 2014 I got a subsidy (interest relief 2014 budget-Chidambaram) by submitting my family income certificate.

I was in contact with the bank all the time.The bank reassured me not to pay the installment and wait for a settlement.I had shared all my problems with the branch to convince them that I am not an will full defaulter.The bank offered me a settlement amount of 4 Lac initially.But ,it was a huge amount for me.So,I couldn't settle the loan. Now ,they have ruined my CIBIL score too.The current Debt Amount is RS 5,55,000/- till date.It will be 6 Lac 30 thousands after March according to Bank.

Six months ago,the Bank is offered me a settlement amount of 4 Lac 50 Thousands. In order protect my CIBIL score ,I tried to sell some property and took loan from my relatives.But the Bank again changed the settlement amount to 5 Lac. Today,I called the branch showing eagerness to close the loan,the bank changed the settlement amount to 5 Lac 50 Thousands. I am feeling helpless.The bank is harassing me.I can't trust their word.Please guide me,how can I settle the loan or any other procedure to safely close the debt So that I can get NOC .

I am again taking loan from other relatives to protect my CIBIL and to reduce tension from my family. The branch agencies are not keeping their word.They are just trying to exploit me.Please guide me,how can i close the debt in a safe and legal way ,so that bank can't further demand the interest amount in future.

I want the NOC and clear CIBIL score too. I believe your sense of judgement and experience.I have decided to pay the debt ,they agreed to settle.But I can't trust the Bank. Please guide me the way to settle the loan without any cheating.

*Would you please share your contact number?.

 

Thanks, Jiten

1. I am aunable to understand how Bank can be called as cheat when you have not paid the Bank after taking huge amount of loan though agreed to pay them back with interest,

 

2.You have got adequate reklief and please note the the money you have taken from the Bank is Public money which you are legallybound to return,

 

3. You have taken it for granted that the Bank should bear the burnt for your failure to get good job and you should continue to get reliefs from the Bank and your CIBIL score should be alright though you have failed to repay the education loan which attracts lowest possible interest,

 

4. Submit a OTS proposal to the Bank and get it approved in writing so that there is no amguity later on in connection with the amount you shsll have to repay to the Bank,

 

5. Bank is within its right to chare interest on your loan since it is set up for doing banking business and not for showing charity with public money.

K.K.Ganguly Sir,

Really appreciate and admire the way you are advising the people over here. However I am quite amazed to see the credibility of the PSU banks when they give loans amounting to 2-3 thousand crores to people like Vijay Mallya although it was given to Kingfisher Airlines. But did the bank officials evaluate the asset value of Kingfisher airlines when they gave loan of 2-3 thousand crores.

Now it seems that selling off the assets will not even help in recovering the 20% amount. Bank has declared Mallya as wilful defaulter. But does he care ? He is living a lavish life and spending crores on his birthday parties. My respect for the law in this country will only rise when crooks like him are brought to book. You need to payback when you are taking a loan as it is public money. This should be applicable for everyone. However rich ppl find ways to cheat and get away scot free. Bank officials are no way persons of honesty. They take lot of bribes while granting loans. Rules should be strict and enforced at nay cost. In our country though it is the poor and middle class only abide the law. To summarize is there anyway this guy Mallya can be sent to jail.

1. I agree with you that law is not equally applicable on the rich and influential in our country,

 

2. One film actor kills few human beings sleeping on the foothpath like dogs but nothing happens to him,

 

3. Another gets jail term but stays at his home on parole most of his prison term. Media gives him hero's reception when he is finally released from the Jail,

 

4. For god's shake do not try there ways otherwise you will be made by the State to understand how strict is our law for the ordinery. 

Dear Sir/Madam

I took education loan Amount Rs. 4,00,000/- from a nationalised bank at the rate of 11.25% in 2006. My education completed in 2008. I have not contributed any amount towards repayment until 2010 because of bad economic condition in that period. I received a letter from third party recovery dept. to make payment of Rs. 5,80,000/- and settle your outstanding. I replied in writing to make payment of whole amount in EMI of Rs. 12,000/- p.m. and payoff my outstanding. Third party recovery dept. suggested to make regular payment to bank. I sent the same letter to bank what i sent to rec. dept. and started making payment of Rs. 12,000/- p.m. untill Dec. 2015. There was a gap of 1 or 2 months in payment every year due to some personal and professional reasons. I have totally paid around Rs,5,04,000/- by Jan 2015.

I was about to pay around 35,000/- last month but i received another letter from a bank saying that your education load account balance is Rs, 5,13,000/- and make the settlement within 10 days. I hold on making the payment of Rs. 35,000/- and requested bank to provide me the bank statement. Following is the analysis.

1. Bank charged compounded interest.
2. Bank statement is not showing the monthly debit amount w.r.t the monthly credit amount of Rs. 12,000/- for the period of 2 years.
3. Suddenly, They have added/debited Rs, 2,23,000/- in to my in early 2013.
4. Statement is not showing proper record of interest charged on the reducing principal amount for the period of 2 years.

My problem is..
1. The outstanding was 5,80,000/- Before 5 years. I agreed on paying monthly amount of Rs, 12000/- to settle the outstanding and paid Rs. 5,04,000/-. But my outstanding balance is still Rs. 5,13,000/-
How to settle this with bank?

2. Once bank handed over the case to recovery department. I agreed to make the payment then is there any possibility to reopen the case to normalise and handed over to the bank? May i expect any letter/communication on normalisation of account from bank or reco. dept.

My stand
1. Loan Amount - Rs. 4,00,000/-; Principal Outstanding Amount with interest - Rs. 5,80,000/-; Paid Amount - Rs. 5,04,000/-; Balance Amount - Rs. 76,000/-. I requested bank to send full and final settlement letter for this balance amount. I will make the payment and settle my account.

2. If Bank is charging reducing simple/compound interest during my repayment then also my balance shouldn't be more than Rs. 3,50,000/-

I tried to submit f&f settlement request letter but they are not accepting. Then i sent the same letter via email and reg. post. and requested to reply.
I also, requested to provide me proper bank statement with monthly debit and credit details. They are not providing me.
When i actually calculated the rate of interest charged for few months randomly. It's showing 11.51% instead of 11.25%.

Bank is really not accepting my communication and asking me to make full payment. Also, politely said that you make a payment of Rs.30,000/- now and continue paying the same ways. if i do the same then the whole process will repeat every 5 years.

Sorry if i added any irrelevant line.

Please advise.

Thank you!