[NetfreakBombay]

Originally Posted by Sankar

Car loan cannot be foreclosed just by giving a cheque for the said amount.
I have foreclosed two loans with HDFC and the procedure requires you to give an application for the foreclosure of the said loan and you have to SIGN it. I believe all banks needs some form of written and signed document for the foreclosure of any loan.

Other than his procedure, system also initiates closures as part of EOD (End of Day) processing. That is if all principal amount has been paid.

That might have happened in this case. Other customer might have made full or partial payment and that payment would have been sufficient for this account.

Another "manual" error that happens is:

1. Customer walk in and asks for account details (principle outstanding etc)
2. Operator searches by name and clicks on a different account (human error) with similar name. OR due to spelling mismatches like mishra/misra only one result shows up (wrong one).
3. Operator tells outstanding of wrong account and account number of the same account.
4. After operator deposits cheque and cheque is processed:
A. Loan account will have zero outstanding
B. System will initiate closure, and back office will send NOC

[Ahmed]

I agree that Bank is at fault here. I also agree that you should seek help from a lawyer to get things sorted out.

Indeed there is a human error involved in this and like other have mentioned here, even I will suggest that you should not be speaking with the other customer and sorting the things out. Bank should ideally re-open your account and transfer the respective funds accordingly.

Also - please note that the amount being paid in EMI is accounted for in terms of taxation. Arranging a heavy amount as such for closure also needs to be accounted... You might end up in other issues here - better keep off and let the bank bear the pain.

[Sankar]

Originally Posted by NetfreakBombay

Other than his procedure, system also initiates closures as part of EOD (End of Day) processing. That is if all principal amount has been paid.

My experience is limited with HDFC Bank, here the operator told us the balance amount payable for foreclosure and to close the loan it was necessary to give a foreclosure letter to the manager along with the cheque. Probably this method is to prevent any foul play or mistake like what has happened with the OP.

I still believe that foreclosure isn't possible without written authorisation.

Parents closed a home loan recently and the procedure was to give a written request for foreclosure.

[rajeev k]

The mistake here was committed by the third party's proxy who deposited the cheque favoring your loan account. He never even confirmed with the third party regarding the outstanding balance in the loan account. (Perhaps the balance payable by you and the third party might have been an almost similar amount.)

[Warwithwheels]

Look at the other side of the story. The car loan account of the other person would not have had any credits for the said period. May be it is in the verge of getting classified as NPA. Now, the Bank gets the right to repossess the car and realize the amount due to the bank.

Any further delay will only make things worse. Just find out the total amount deposited by the other party in your account with details such as Check number, date, Drawee bank etc.,

Hire a counsel and ask him to draft a notice to the effect that you are making good the loss suffered by the other person and that you will not be responsible for any further claims either directly or indirectly. Just make sure that you refund the money thru' a crossed check.

Rightfully the bank should have taken up this issue and sorted it out voluntarily but the attitude of the bank is really heartening.

This could be just one way to resolve the whole issue amicably without any further delay.

[NetfreakBombay]

Originally Posted by Sankar

My experience is limited with HDFC Bank, here the operator told us the balance amount payable for foreclosure and to close the loan it was necessary to give a foreclosure letter to the manager along with the cheque. Probably this method is to prevent any foul play or mistake like what has happened with the OP.

That is correct process for "customer initiated" closures of account. Customer has to fill form and in some cases tell source of funds.

Originally Posted by Sankar

I still believe that foreclosure isn't possible without written authorisation.

System initiated closures do not require any involvement of customers. For example, if there is a charge-reversal (E.g. reversal of late payment charges) and that Zeros the account. Or the case with last EMI payment.

From OP's point of view:

1. This has to be legal procedure, with registered agreement.
2. Bank, OP and Depositor have to be party to the agreement. This is to establish identity of customer that made the mistake and will receive the money.

[mayankk]

Shouldn't you be approaching the banking ombudsman with this?

[aeroamit]

Thanks a lot everyone for your suggestions. From our side we never initiated any sort of process for the Closure of Car Loan , and to be frank we were not aware until, my Father went to get the Passbook updated. Also, when my Father visited Retail Asset Branch for more information, he was given NOC and the Cheques given by myself at the time of availing loan were also returned back to him as the Car Loan account was closed. I do not want to initiate any kind of in-person talks with either Bank or the other Party and also do not want my Parents to be running for the issue. I will be able to take up the issue , only once I am back to India in Jan-2013. I had provide Bank with my Contact details in Canada, so that they can call me or if other party wants , then they can also reach me over phone. I am very clear that deposited money is not ours and should be returned to the person who deposited in the Bank. But at the same time ,why should we take unnecessary tension for no fault of ours.


Thanks
Amit

[~~h]

What if this person has not paid your loan at all ?
What if it's some insider in the bank who knows your case is playing to make some quick bucks ?
What is a third guy show up after you pay this guy ?

So my advise; let the bank deal with it; they are the ones who have the transaction records. If I were you; wont even speak 1-1 to this person.

[Animesh]

Originally Posted by ~~h

What if this person has not paid your loan at all ?
What if it's some insider in the bank who knows your case is playing to make some quick bucks ?
What is a third guy show up after you pay this guy ?

So my advise; let the bank deal with it; they are the ones who have the transaction records. If I were you; wont even speak 1-1 to this person.

Too much being read into this. The person who deposited the cheque would have a 'debit note' on his bank account and can use it as 'proof' that he/she indeed was the person who made the 2 lac payment.

[dar3dev|l]

My View Point:

- The money is paid in Cash in unknown PNB Branch. (The 3rd party and teller could have joined hands and get the Black money (cash) deposited into your account.
- Now they request you to pay him back. Let me guess, they would want a cheque
- Bank cant pay cash and dont want to issue a cheque.
- If you end up agreeing to pay 2L as a cheque, this would be a classic of a Money Laundering case. (Unless you decide to pay the 2L as cash.)

Now, it could also be possible the teller might missed checking the A/C no and put a credit in your account instead of his (due to similar names). But again this is something the Bank should be responsible for.

If the 3rd party has made an error in typing the A/C number wrong. He should be the one to tackle it with the Bank. You should not be bothered.

You must take a stand to continue to pay the EMI till your tenure. If the Bank closed the loan without any verification, closure letter, etc. Its the Bank's fault and I am sure they should be having a provision for such error's. Just that they might not be aware of and dont want to escalate the mistake/error to their Head Office's for a solution.

[bullboy]

I think this is some error caused from the banks side.
How the third party know that exactly 2 lakh need to be deposited to close your account?
Like mentioned in aboved post, the bank officials reffered to wrong loan account (ie, yours) and informed the third party that he need to pay 2 lakhs, and he send a cheque for that.
Bank processed it against your account and closed the loan.

But also think of the other poor soul who deposited full amount to wrong account and he has to pay his EMI too!!

Another question is if his account were not closed he would have got EMI debited the next month and he should have asked it next month itself rather than waiting for 9 months!! Unbelievable.

[selfdrive]

Whatever you do, please dont deal with an unknown individual. And no payments to that third party even if your loan account is closed and you have been sent the NOC. Please limit your transactions to the bank only else it would have implications elsewhere.

As said by others, this has to be dealt with by the bank as it is their mistake. If any compensation needs to be given to the other guy, it has to go from the bank.

[DieselFan]

please ask bank to handle this whole mess in writing and ask them for a response in writing. Then take this issue with Bank Ombudsman. See how fast PNB will act once you go to Bank Ombudsman.

[alexpaul]

This is clearly bank fault's and they are trying to wash off their mistake by asking you to intermediate.
How come PNB bank is still accepting your monthly EMI's when your loan account is closed?