Now Reading: Loan default does not permit instant property seizure or harassment
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Loan default does not permit instant property seizure or harassment
A single missed EMI does not allow a bank to seize a borrower’s property, Mint reports. For secured loans such as home, vehicle, gold and loan-against-property loans, lenders can enforce security after…
The Story in Brief
A single missed EMI does not allow a bank to seize a borrower’s property, Mint reports. For secured loans such as home, vehicle, gold and loan-against-property loans, lenders can enforce security after the account becomes a non-performing asset and the required legal process is followed. Under Section 13(2) of the SARFAESI Act, the lender must issue a 60-day demand notice. Borrowers’ objections must be considered, with reasons for rejection communicated within 15 days.
RBI rules bar banks and their recovery agents from threats, humiliation, anonymous calls and repeated contact before 8 a.m. or after 7 p.m. Banks remain responsible for outsourced agents. Borrowers should preserve evidence, complain to the lender, escalate unresolved cases through the RBI mechanism and contact the police over serious threats or violence.
The Indian Opinion
The claim that any missed EMI means immediate confiscation is as misleading as the belief that borrowers can ignore recovery notices. Secured lenders have legal remedies, but those remedies require classification, notice and due process. Recovery agents cannot shame families or threaten arrest over unsecured debt. Borrowers should keep records and seek repayment options early. The practical test is whether the lender has issued the required 60-day notice and followed the complaint process.
Source: livemint.com
This story was synthesised by AI from the source linked above.
