New Delhi. In today’s era, taking loan from bank for house, car or business is a common thing. But sometimes due to financial constraints or some untoward incident, people are not able to pay their EMI on time. In such a situation, the biggest fear is whether the bank will evict you from the house overnight or auction the property?
If you are also in similar fear, then it is a matter of relief that the law is made not only for the banks but also for the protection of the borrowers. According to Patiala Court lawyer Mahmood Alam, the bank cannot sell your property directly even if it wants to. Let us know what are the rules that keep your property safe.
Lawyer Mahmood Alam explains that when a person continuously 90 days (3 months) If you do not pay your loan installment till then the bank will close that account. NPA (Non Performing Asset) declares. This means that in the eyes of the bank this money is now on the verge of sinking.
After being declared NPA, the bank does not auction the house immediately, but sends you a demand notice. In this you are given 60 days to repay the dues. If you do not make payment even within this period, then the bank SARFAESI Act Proceeds under.
There are certain conditions in the law where the bank’s hands are tied and it cannot auction your property:
Security on repayment of 80% loan: If you have increased your total loan 80 percent or more If the share has been paid to the bank, the bank cannot seize or auction your property under the SARFAESI Act. In such cases, the bank will have to approach the ordinary civil court to recover the money, which is a lengthy process.
Dues less than Rs 1 lakh: If your outstanding balance less than 1 lakh rupees Even if it is, the bank cannot use this strict law.
Agricultural Land: SARFAESI Act does not apply to agricultural land. The rules for farmers’ loans are different and quite flexible.
This law was brought in the year 2002 to empower the banks. Under this, banks get the right to take possession of the property of the defaulter and recover their money by selling it without going through the court. However, as much as it appears to be in favor of banks, it also includes a ‘right to appeal’ for borrowers. You against the notice of the bank Debt Recovery Tribunal (DRT) I can express my views.
If you are really in financial trouble, go to the bank instead of hiding. Banks often offer the following options:
Loan Restructuring: The time period can be increased by reducing your EMI amount.
Grace period: There may be a moratorium on installments for some time.
One Time Settlement (OTS): Option to close the account by paying a fixed amount.
