can Bank personal loan recovered from Nominee
8 months ago
My brother gave personal loan from Ratnagiri district co operative bank in 2016. But in this condition my bro has expired in 2018 in an accident. Guarantor of this loan also expired. can Bank recovered this loan from Nominee. Bank notice to me in may 2023
A.Dear client, If you were the legal nominee or heir of your brother, then unfortunately the bank does have the right to collect it from you. However, if your brother has any insurance then you can use that to pay on the loan amount
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A.Dear Client,
Banks and financial institutions have the right to initiate legal proceedings against a borrower if a loan is not paid within the specified tenure. However, if the primary borrower dies before repaying the loan, the bank can recover the sum from the co-borrower, guarantor, or legal heir. In the case of a personal loan, which is an unsecured loan, the lenders cannot ask the legal heirs or the surviving members of the dead borrower to pay the outstanding amount. Such loans do not involve any collateral; hence, the bank cannot seize and sell any asset of the borrower to recover the amount. The outstanding balance is eventually written off and added to the NPA account by the bank. But, if there is a co-applicant, then the bank can shift the liability to that person after the primary borrower's death. The same applies to other unsecured loans, such as credit card loans. However, if the personal loan availed by your brother is a collateral-backed debt then the Bank can ask the legal heirs of the deceased to pay up or the pledge would be invoked and security can be taken up for possession and then sold off to recover the money. So, the legal heir(s) of the deceased borrower is/are liable to repay the loan taken by the deceased borrower to the extent of the Estate of the deceased borrower received by the legal heirs. For recovery of debt, the period of limitation is three years from the day the money was lent. Suppose there is no dispute regarding the money lent within three years of lending it. In that case, the Court may refuse to entertain the suit for recovery of debt being barred by limitation. Currently, most unsecured loans come with insurance for the primary borrower. The insurance covers the loan amount and remains valid for the entire loan repayment period. Thus, in view of the above proposition of law, on receipt of notice from the Bank you need to approach an Advocate for guidance and steps.
Banks and financial institutions have the right to initiate legal proceedings against a borrower if a loan is not paid within the specified tenure. However, if the primary borrower dies before repaying the loan, the bank can recover the sum from the co-borrower, guarantor, or legal heir. In the case of a personal loan, which is an unsecured loan, the lenders cannot ask the legal heirs or the surviving members of the dead borrower to pay the outstanding amount. Such loans do not involve any collateral; hence, the bank cannot seize and sell any asset of the borrower to recover the amount. The outstanding balance is eventually written off and added to the NPA account by the bank. But, if there is a co-applicant, then the bank can shift the liability to that person after the primary borrower's death. The same applies to other unsecured loans, such as credit card loans. However, if the personal loan availed by your brother is a collateral-backed debt then the Bank can ask the legal heirs of the deceased to pay up or the pledge would be invoked and security can be taken up for possession and then sold off to recover the money. So, the legal heir(s) of the deceased borrower is/are liable to repay the loan taken by the deceased borrower to the extent of the Estate of the deceased borrower received by the legal heirs. For recovery of debt, the period of limitation is three years from the day the money was lent. Suppose there is no dispute regarding the money lent within three years of lending it. In that case, the Court may refuse to entertain the suit for recovery of debt being barred by limitation. Currently, most unsecured loans come with insurance for the primary borrower. The insurance covers the loan amount and remains valid for the entire loan repayment period. Thus, in view of the above proposition of law, on receipt of notice from the Bank you need to approach an Advocate for guidance and steps.
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