Legal Question in Credit and Debt Law in India
We are a cooperative bank. One of our borrower cooperative society has taken huge amount of loans from us. Initially it was a very good society whose monthly repayment used to be absolutely in time and regular. but of late it has drastically reduced its monthly repayment. On writing the secretary gives in writing different undertakings that the loans will be re-payed in time. But what it pays monthly now does not even cover the interest part of the loan. in this situation what course of action should we take?
1 Answer from Attorneys
19.02.2015
Dear Sir / Madam,
In my opinion, the co-operative society seems to be repaying a meager monthly installment to prevent the Loan A/c from becoming an Non Performing Asset. As a co-operative bank, you need to firmly resolve (by holding a joint meeting of the co-operative bank office bearers with your Bank's Board and get the Co-operative Bank's commitment to the date by which the entire loan amount will be cleared by the co-operative bank and duly freeze it. Your Bank should thereafter initiate legal recovery proceedings u/s 101 of the Act and serve summons on the Society.
Regards,
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