At the time of lockdown, we got to hear the word “loan defaulter” many times in the banking system, because for the last two years, due to the corona epidemic, we have got to see the effect on the entire economy. The second problem of personal loan in India is that the purchasing power of the people is much less than the developed countries. Private banks and NBFC financial institutions provide loans bypassing the rules given by the Reserve Bank while giving loans many times to keep themselves alive in the market. Because of which the 1990s saw that a financial institution like GE Money, which is the top company of America, has failed in India.
The instability of jobs, competition of business and population of the country is the root of our economic problems in which banks attract people to buy personal loans in developed countries who take loans for luxury. In India, this proof is for personal needs such as for marriage in the house, for treatment and for other compelling reasons, in which the need of that person is more important than how that debt will be settled. That’s why most loan defaulters are of this level. Very few people are seen for the purpose of sinking the loans of the banks for the wrong purpose.
Therefore, through this article, we will try to give information about what is personal loan default, and how to get out of it. Because our problem is that it takes a lot of time for justice in the judicial system of India, so banks and financial institutions try to recover their debt by using other methods. For cost control, instead of appointing bank staff, it gives many tasks to the agency through contract. So most of the time this agency handles this recovery incorrectly. So we will try to deal with such situation in detail.
What is Personal Loan Defaulter?-
Corporate sector loans are the most risky for banks as it is very difficult to recover. That’s why most of the successful banks and financial institutions prefer to give loans on a small scale. In which the security law is very less to recover or due to ignorance of the people, banks get its benefit. So first of all we have to understand what is a bank loan defaulter? With which we will try to understand its legal process.
Personal Loan Defaulter This is a banking process in which the bank declares your loan as NPA for non-payment of more than three consecutive installments, which is called “Non-Performing Asset”. For this, security has been provided to the banks by the Reserve Bank and by making laws like DRT in the Parliament. Before 1990, only government, banks, or cooperative banks are seen in India, after that competition started in the market through private banks and private banks started running their business through competition, which was the job of the Reserve Bank and the government to protect .
Due to this, the government and banks started ignoring the safety of customers and due to the flaws of the judicial system, banks and private institutions started looking for different alternatives. Which was tightened by the Reserve Bank after 2007. Still, not much change is seen in it. Personal Bank Defaulter Process This is a civil matter, but if the loan is taken through forged documents, then criminal cases are also registered. If the purpose of the customers is to repay the loan but due to legitimate reasons they cannot repay the installments, then it is not a criminal matter, it can be done through discussion or settlement.
Personal Loan Defaulter How To Get Rid Of Loan -,
Most of the reasons for being a personal loan defaulter are job problems and business losses. Many times there are serious health-related diseases in the family, due to which the financial planning gets spoiled. All these reasons are the real reason of our life, which we should solve together with the bank, just we do not know its methods, so we get caught in a deeper crisis. Being a personal bank defaulter is like an economic maze, which is very important to understand calmly, otherwise its serious economic consequences are to be seen in the future.
Therefore, our incomplete information is the reason for our fear, it is a good option to increase the information to eliminate it first. After getting the information, it is necessary to implement it so that we have to understand how to get out of this loan default process. What happens first when you become a personal loan defaulter? Installments are paid, interest increases and your credit score goes down, you lose your loan options. That’s why we have to first increase the means of our income and do we get any option by talking to the banks about the actual situation? Will have to see it.
The tenure of the loan can be extended or one has to pay the principal amount and interest through loan settlement. The amount of loan default, and the amount of interest can be repaid through the options available with you, such as by taking a loan on gold or taking money from close friends and friends for a short time, but it is a half option but this problem is rooted out. To make ends meet, you’ll need to find more income options as quickly as possible.
Personal Loan Defaulter & Legal Process –
Personal Loan It comes under the category of unsecured loan which is given against your income and goodwill. The market for personal loans in India is huge and the competition is also very high, so many times banks are given loans by bypassing the rules. In this, mainly government, banks and private banks do not take this risk, but this option is used more by NBFC institutions. These organizations take advantage of this because people do not have much knowledge about the law and lack of information about individual rights.
Many financial institutions are well-known successful financial institutions in the stock market of India, which easily give this illegal result to their recovery at the ground level. Despite the regulation by the Reserve Bank, there is no change at the ground level, it is a reality. Being a loan defaulter is a civil process, for which the government has enacted a law and a tribunal system like DRT has been created to quickly end such disputes, which benefit the banks. But ignorance of the rights of the customers is easily seen.
Most of the loan defaults are due to this circumstance, for which there is a legal process, which includes sending notices, discussing with the customers and finally, if the customer, intentionally does not want to give money to the bank, this purpose comes to the fore, then the banks are legalized through tribunals and courts. Security has been provided. In most of the cases, the cases of loan defaulter are due to this circumstance and in this the attempt to go through the legal process is not seen most of the times, due to which the customer is in India in the banks by taking money from anywhere, due to which he gets caught in further financial crisis.
Personal Loan Defaulter & Bank Recovery Facts –
When our personal loan installments stop paying or regular installments are not paid in 60-90 days than our loan goes into NPA. Due to which the recovery process of banks and financial institutions is accelerating. If one or two installments are not paid, first messages and phone calls start, and as installments are missed, the recovery process gets faster. Banks and financial institutions have been approved by the Reserve Bank of India for the service of recovering their money by appointing an agency.
Taking advantage of this, this agency uses shortcuts many times to increase its performance. Reputed companies of private companies try to do this process mostly legally, but their agencies use their political power to recover on the wrong path many times, this is our reality. Therefore, the bank loan defaulter should try to finish this process as soon as possible, which includes the principal amount, as well as the interest, which is due to these defaulted installments.
After being a bank loan defaulter, our CIBIL score is bad, which may make it difficult for us to take loans in future, but this is an incomplete truth that we have to understand. The score of CIBIL keeps on increasing and decreasing as soon as you start paying your installments regularly, this score increases, so it is important to pay attention to how to regularize the loan in case of default. Our problem is that instead of focusing more on how to increase the income, we want to plan the expenditure. The government has set up a tribunal for this, through which this dispute should be resolved.
Personal Loan Defaulter and Customer Rights –
Most of the people are not aware of the law of the Customer Protection Act in the dispute related to the loan, due to which the bank also sees only the things of its own benefit while giving its service. Banks and financial institutions know that customers are not aware of their rights, so they do not keep these facilities in front of you even after giving loans. Therefore, we have to find such facilities, which are beneficial for us while paying off the loan.
From applying for the loan till the end of the loan, we should be aware of the documents and services that we have to give to the bank, in which we have the right to get the documents from the agreement copy to the no objection certificate at the end. It is the duty of the bank to give you information about the loan recovery process, in which there are many such things to give information about the person who is going to meet you through the first message.
Customers are required to maintain their rights and entitlements ranging from documentary evidence to video and audio recordings from inception to the end of the loan. Without proof, you do not get justice only on emotional evidence, so we should keep all these things in mind. Customer Protection Act This law has been made only for the protection of the customers, so most of the justice is given in the interest of the customers. We can file this complaint along with the documents through online mode. In which there is a possibility of getting the amount in the form of loss from the banks to the fine.
Personal Loan Defaulter & Rights of Banks –
After 1990, the policy of liberalism in India was accepted by the Narasimha Rao government, in which the government would have to work to give incentives to companies and private banks. For this initiative was taken through the World Bank and International Monetary Fund and foreign companies and investments got direct entry in India. We call this capitalism, in which instead of keeping only the interest of the customers in mind, laws are made for the protection of the banks companies. For this many security laws like “SARFAESI” law were brought in India.
In view of the shortcomings of government, banks, incentives were given to private banks and institutions, for which tribunals like DRT were created in which the disputes of banks and customers could be resolved expeditiously. That’s why we see that due to digital technology, a lot of fraud is being seen where people used to run away with loans by showing a fake paper. Through an online process like CIBIL, ratings of people were made, in which it became easier to give loans. In view of the shortcomings of the traditional judicial process, tribunals were created.
As long as the security is provided to the customers, as long as its purpose is to repay the loan, if the purpose of a customer is to lure the bank or if the installments are not paid intentionally, then strict rules have been made for the banks. Therefore, many private banks in India today have developed into very successful financial institutions after getting the protection of the law. Banks and financial institutions have been given some rules under the law only by making bank recovery illegally themselves, which they have to follow, earlier such loans are eliminated by writing off, but today they are finally giving to the banks to recover. Is.
Personal Loan Default & Indian Economy –
If we inspect from village to the countryside to slum areas of cities, then people are ready to pay interest from 10-20 percent month for fifty thousand rupees. We get to see this kind of economic disparity, so the banking sector is considered a profitable sector due to the interest rate of many banks being much higher than the developed countries for giving personal loans. This means that there is such a class in India that it is not even in a position to take loan from such banks.
In such a situation, it is very difficult for the banks to run their business by following all the rules to survive themselves, so some banks have created a technique to be successful. In which the recovery of such loans is done successfully by making a system focusing on the recovery by looking at more documents while giving the loan. Due to which such banks trap such customers in a maze at high interest rates in super profit, like the moneylenders of the village used to do earlier, but this is done by keeping the law in mind.
It is not that all banks and financial institutions are involved in this, but through agents or in one way or the other these things are seen in banking recovery. In the corporate sector, we have seen cases ranging from Vijay Mallya to Nirav Modi, in which banks have suffered losses. Therefore, it is easier to earn profit from small customers at low risk rather than lending to the corporate sector. The ordinary customer cannot fight with the legal team of the banks in the legal process, this fact is known to the bank, hence the customers are exploited.
Precautions for Personal Loans –
By the way, in most of the loan defaulter cases, the customers fail to pay the installments for the right reasons and only a few percent of the loans are such where the banks’ loans are not repaid with the purpose. So if our reason is right then we should try to know it properly instead of fearing any bank recovery. Which is the right law? What are your rights? And what are the rights of banks? After knowing this, the most important problem is the problem of the recovery agent who gets to see such cases again and again with phone calls and threats.
If we want the law to help us, then first of all we have to learn to follow the law ourselves, in which whatever the person does in front, we have to gather evidence instead of being violent. The process of recovery agent has to be understood, in which first the bank sends you a message which contains the name and phone number of the recovery agent. We have the right to block the rest of the fake numbers, we have to keep this in mind and only those who are correct numbers will have to attend. The recovery agent has to understand the rules framed by the Reserve Bank.
- identity card
- Authorized letter of the bank if it is an agency
- police verification letter
With such documents you have the right to meet this person wherever you want and have the right to have your say. If such a person wants to complain about wrong behavior, then you can do it on the registered email or mobile number of the bank. If this complaint does not taken cognizance by the bank, then you can complain to the Reserve Bank, which can be done online through email or social media. Understand and respond to the legal notice or other document of the bank through legal expert or yourself. Many times you are threatened by fake documents, learn to test such documents.
The idea of buying an item through installments was first used in the 19th century to increase sales in the agricultural sector in America, the economy and people started taking loans through this method of EMI. Whether it is a personal loan in America or any other loan, the interest rate is much lower than in India. In India, most of the loans are taken to meet this need, and the interest rate on it is also high, but due to compulsion, it is taken more.
So for the last few decades, we have seen that some companies in the banking sector have performed well. Therefore, it is a profitable business for banks and financial institutions, for the same customers, their needs and dreams of buying some luxury things are fulfilled. But sometimes some such occasions come in life that our regular income stops and we stop paying its installments. That’s why we get financially trapped in such a maze and do not sit for social service to the bank, so it does not try to give any advice.
By which the bank loan can also be obtained and the financial problem of that person will also end. That’s why this crisis keeps on deepening and in today’s society it has become not only the problem of poor people but it has also become a problem of ordinary earning people. That’s why we have tried to keep this information in front of you on how to get out of personal loan default through this article. If the purpose of the customers is honesty, then the customer is the court for that and the Reserve Bank also punishes the banks for this.