Can a bank declare a customer loan defaulter when there is an active e-mandate Can a bank declare a customer loan defaulter when there is an active e-mandate

2 years ago

Can a bank declare a customer loan defaulter when there is an active e-mandate to autodebit the EMI from another bank is in place? In this case the outstanding on credit card was restructured by online application through the bank's website in December 2020 and the same was approved by the bank in late December 2020. Creation of e-mandate for the restructured EMI was part of the restructure application. Additionally the bank sent another e-mandate request form which was again filled in and submitted and this was made active sometime in late January 2021, an SMS from the payee bank was received in this regard intimating me that the e-mandate is active for the EMI amount favouring the credit card issuing bank. NO EMI got deducted since the creation of e-mandate between January and June 2021. In January the bank requested to pay through netbanking citing that it takes at least 30 days to activate e-mandate. In February, to utter surprise, the bank called me and said due to technical issue the EMI can not be autodebited and I again had to pay through netbanking. In March I sent a letter to the collection manager of the bank and asked him why EMI is not getting deducted through this e-mandate? Also in this email I requested them to get the EMI payment through this e-mandate OR cancel the E-mandate. No answer received. Sent a complaint to the Nodal Officer but again no reply received within 30 days. In the meantime, the bank started sending me emails and SMSs first, then continuous calls, and finally one visited to my residence and created a chaos and refused to leave for about 4 hours on Sunday afternoon and he was demanding cash payment for about one-third of the total three months' outstanding which I did not pay. Specifically for April, May, and June EMI I did not pay. Now, the bank is stating that I am a loan defaulter because of not paying the EMIs!! My query is, is this bank right from strictly legal perspective that I am a loan payment defaulter despite an active e=mandate to autodebit the EMI is in place? The e-mandate is still active to date and they have most recently email-ed me a legal notice through their inhouse legal dept. what should I do now?

Anik

Responded 2 years ago

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A.Hi,
According to the definition, default is the failure to repay a debt, including interest or principal, on a loan or security. A default can occur when a borrower is unable to make timely payments, misses payments, or avoids or stops making payments. Therefore if there was a non payment of due then it would be considered to be default.
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Ayantika Mondal @ Prime Legal

Responded 2 years ago

A.Hi,
You weren't able to pay as the auto-debit through the e-mandate malfunctioned. In that case, the amount was defaulted. It is advised to you that you clear all your existing liabilities in order to avoid any further penalty amount. Thereby, you can contact the respective bank officials in order to enable the auto-debit function.
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Kishan Dutt Kalaskar

Responded 2 years ago

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A.Dear Sir,
You may raise your objection and get the matter settled by approaching Banking Ombudsman. If not settled then approach local civil Court and get a clear directions to the Bankers.

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Abhimanyu Shandilya

Responded 2 years ago

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A.If the e mandate is not working then you are paying through net banking right? Then you continue to pay through net banking and resolve the issue because you need to understand one thing that non payment of loan or due amount on credit card due to any reason will make the liability fall on you. It's a different matter that when you there is a dispute and you go to the court or for arbitration then court may decide after looking into all the facts but the matter is that the bank has been telling yo that there is a default and you have to pay then you have to pay by any means whether its e mandate or otherwise.
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