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

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


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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