Loan assignment between banks (after the death of borrower)

2 years ago

Good day everyone. My cousin took a personal loan from one of the top pvt sector Indian bank in 2018. He was a software engineer and paid emis regularly till his expiry (road traffic accident) in June, 2019. Upon not receiving the emis after his death, the bank people reached his hometown to enquire and collected his death certificate from family. Recently, the wife of deceased has received calls from a different pvt sector bank saying the loan got assigned to them and she's liable to pay the loan. As per their records the loan assignment between those 2 banks took place in Dec, 2019. Now the other bank started threatening the wife of deceased, a single mother for the pending amount.

All we want to know is this assignment legally valid? considering the first bank collected death certificate and transferred the loan after the death of borrower? Appreciate any help here.

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Ankur Goel @ Complete Law Shield

Responded 2 years ago

A.Obviously You (not she) have to pay his personal loan.
you took his PF, insurance, accident benefits etc.
so you have to pay to the limit of money you got.

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Sidhaarth

Responded 2 years ago

A.Such assignment for recovery is illegal and wife of deceased can question the assignment on various grounds. If wife is not the guarantor then after death of husband she has very limited liability. Such threat are illegal and matter can be reported to police.

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Abhimanyu Shandilya

Responded 2 years ago

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A.Please let me know what kind of loan was this and what was written on the sanction letter and loan agreement. In all likelihood this seems to be an armtwisting method to recover whatever they can from the lost/NPA account once the NPA account has been sold to the other company and this would be illegal.

With my banking background I can assume this to be wrong and illegal

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