Regarding loan Recovery
3 months ago
I got to know that as per RBI rule interest amount can not be more than Principle amount. How true it is. And if so, can I take legal action against a loan provider if disobey this rule.
A.Dear Client,
The information you've heard is not accurate. There is no specific RBI rule stating that interest cannot be more than the principal amount. However, the RBI regulates interest rates to ensure fairness and prevent usurious practices by financial institutions. Lenders are required to follow the guidelines set by the RBI regarding interest rates and other terms. If you believe that a lender is violating RBI regulations or engaging in unfair practices, you may consider filing a complaint with the Banking Ombudsman, an authority appointed by the RBI to resolve customer complaints against banks and certain financial institutions. It's advisable to review the loan agreement, terms, and conditions to understand the specific terms governing your loan before taking any legal action.
Thankyou
The information you've heard is not accurate. There is no specific RBI rule stating that interest cannot be more than the principal amount. However, the RBI regulates interest rates to ensure fairness and prevent usurious practices by financial institutions. Lenders are required to follow the guidelines set by the RBI regarding interest rates and other terms. If you believe that a lender is violating RBI regulations or engaging in unfair practices, you may consider filing a complaint with the Banking Ombudsman, an authority appointed by the RBI to resolve customer complaints against banks and certain financial institutions. It's advisable to review the loan agreement, terms, and conditions to understand the specific terms governing your loan before taking any legal action.
Thankyou
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A.Dear Client,
There is no rule of RBI as such as claimed by you. A loan or debt comprises both principal and interest and once the debt/loan is not repaid as per the schedule of repayment, the entire amount accrued interest over interest on default of repayment of the outstanding amount of the loan by the borrower for a long time and consequently the amount of interest crosses the base amount of principal in course of time enhancing the financial liability of the borrower. So, in the absence of any deviation or deficiency on the part of the lending Bank, it deserves no action from the end of the Borrower who failed to repay his loan by the agreed time in terms of the loan agreement and made himself liable to face legal consequences.
There is no rule of RBI as such as claimed by you. A loan or debt comprises both principal and interest and once the debt/loan is not repaid as per the schedule of repayment, the entire amount accrued interest over interest on default of repayment of the outstanding amount of the loan by the borrower for a long time and consequently the amount of interest crosses the base amount of principal in course of time enhancing the financial liability of the borrower. So, in the absence of any deviation or deficiency on the part of the lending Bank, it deserves no action from the end of the Borrower who failed to repay his loan by the agreed time in terms of the loan agreement and made himself liable to face legal consequences.
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