Legal Question in Banking Law in India

I had taken an educational loan for doing my PhD. I had initially availed the loan for three years. I sent them two letters stating that my educational period is increasing and i want my loan period to extend. The then bank manager told me to finish my degree and then contact the bank and repay my loan and it is not a problem. But after finishing when i approached the bank they told me that i was in default list and are asking me to pay 50000 above my loan and my loan in EMI ( as per original repayment agreement i have still 26 months to repay)and they have also seized my account. I dont understand why i should pay the extra amount I am ready to repay the amount in 26 months but they will not accept it and are blocking me from repayment. Kindly suggest me some remedy.

Asked on 7/29/13, 10:35 pm

2 Answers from Attorneys

J. Radhakrishnan independent Practice
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Send an appeal to the chairman of the bank and request him for the necessary relief. if he does not redress your grievance make a complaint to Banking Ombudsman.If it is a nationalised bank you can file a writ petition in the High Court.

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Answered on 7/30/13, 5:28 am
Fca Prashant Chavan Expert Edge LLP
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Dear Sir / Madam,

The extra amount of Rs. 50,000/- that the bank is asking you to pay is towards interest for stretching the repayment period of the loan period. For example, if the original loan was sanctioned for a repayment term of 5 years, and for whatever reason you wish to get the repayment period extended to 7 years, the bank is legally entitled to recover the differential interest for the extended repayment period of 2 years. Checking the interest workings at the bank is recommended.


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Answered on 7/31/13, 3:57 am

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