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Dear Client,
As per the RBI Guidelines, Banks/NBFC/FI are advised to ensure that the contracts with the recovery agents do not induce the adoption of uncivilized, unlawful, and questionable behavior in recovery process. In the context, reference may be made to (a) Circular DBOD.Leg. No. BC.104/ 09.07.007 /2002-03 dated May 5, 2003, regarding Guidelines on Fair Practices Code for Lenders (b) Circular DBOD.No.BP. 40/ 21.04.158/ 2006-07 dated November 3, 2006, regarding outsourcing of financial se

Dear Client,
A borrower of a loan is held personally liable for his or her debt for non-payment of the outstanding amount of the loan, and legally, there is no escape route to get rid of that liability. Once the repayment of the loan stops or bounces for three consecutive occasions, the Bank/NBFC initiates a routine course of legal action for recovery of the loan from the borrower, marking the loan as a bad loan/NPA before approaching the Debt Recovery Tribunal or a Civil Court. You can negotia

Dear Client,
Section 25 of the Payment and Settlement System Act 2007(PSSA), states that if an electronic transfer cannot be completed due to insufficient money or if an amount required to be paid out exceeds the limit on the credit card of the payer, the payer can be imprisoned or fined twice the amount or both similar to the dishonor of a cheque under the Negotiable Instruments Act 1881. Section 25 of the Act states that the payee, before filing a complaint under said Act to recover money, mu

Dear Client,

The most important thing is to immediately contact all eight NBFCs. Explain your temporary financial difficulty and let them know you expect to be able to pay in about three months. Ask for a temporary payment suspension (moratorium) or a restructured payment plan. Be prepared for demand notices and potential home visits from recovery agents, but remember they cannot harass or intimidate you.

Document every conversation and communication, and prioritize arranging the funds withi

Dear Client,
Legally, a lender cannot attach or seize movable or immovable property in the absence of a Court's order. Once the repayment of the loan stops or bounces for three consecutive occasions, the Bank initiates a routine course of legal action for recovery of the loan from the borrower, marking the loan as a bad loan/NPA and offering the borrower for one-time settlement of the outstanding loan before approaching the Debt Recovery Tribunal. As per the RBI Guidelines, Banks/NBFC/FI are ad

Dear Client,
Your query suffers from a lack of information and transparency to address it suitably. You expressed your situation, but did not provide a cause of action that attracts a legal remedy. This is a virtual platform, and in the absence of a specific cause of action, suitable legal remedies cannot be suggested based on the standalone situation/circumstances. So, please revert to us with more details and a cause of action that requires a legal remedy. You may consider our paid consultati

Dear Client,
The limitation period for debt recovery in India is typically three years from the date the cause of action arises, that is, the date when a loan/debt is declared a bad loan or NPA. However, different types of debts may have different limitation periods. The statute of limitations varies by state and type of debt, but typically ranges from 3 to 10 years. Once a debt becomes time-barred, creditors or debt collectors can no longer sue the debtor to enforce repayment unless there is a

Dear Client,
When a proposal for the settlement of a loan under the alternate dispute resolution(ADR) process is under consideration/process, calls from the loan recovery or collection agents are unacceptable and uncalled for. So, in the given situation, filing a complaint against the recovery/collection agents of the concerned Bank at the local Police Station, a copy of the said complaint should be sent to the concerned Bank, asking them to take necessary action. Further, a complaint against t

Dear Client,
Be informed that an incomplete or semi-finished promissory note may not serve the purpose, being unacceptable and inadmissible as primary evidence in case you go either for a money recovery suit or a suit under the Negotiable Instrument Act, 1938. An unstamped or inadequately stamped promissory note cannot be admitted as evidence in court. So, ensure first whether the promissory note is executed following the established procedure as prescribed under the N I Act or not, especially

Dear Client,
A No Dues Certificate(NDC) post-settlement of the loan is proof of clearing all your outstanding payment dues with the lender. It ensures that the bank or the NBFC does not ask you to cover any outstanding dues later. This proof also helps you to procure loans and EMIs in the future. Borrowers must obtain a No Dues Certificate (NDC) after settling their debt/dues against a loan, which serves as proof of their cleared dues and can be beneficial for future loan applications and maint