[headbanger]

Lessons learnt:

Learn to say NO.
Avoid cocktail of finance and relationship. If things go wrong, it will go wrong to point of no return.
Learn some basics of finance and legal systems.

[Abhiram]

Another loan related incident in news today:

https://lagatar24.com/hazaribagh-loa...-ichak/121105/

Mahindra’s response:

https://twitter.com/anishshah21/stat...MtkKPvRQ5msenQ

[anjan_c2007]

Originally Posted by RedTerrano

A friend in need is a friend indeed eh?

Well, one Rajendra Raut was such a friend indeed.

All this was too much for Rajendra to cope up with. Seeing no other way out, he hung himself.

https://www.punekarnews.in/pune-two-...oan-guarantor/

I have never understood this bank policy.
Any vehicle purchased on a loan is hypothecated to the bank. In case of non repayment, they can repossess the vehicle and auction it off to recover the dues. Same is applicable to real estate as well.

When their monies are reasonably protected, why insist on an additional guarantor? Is it even legal?

A sad tale of someone who wanted to do good to his friend, getting his due from the society with the highest cost by the do-gooder, paid as victim.

The best remedy for arm twisting tactics would always be to approach a trial court and get a stay and injunction on the flawed procedure being adapted by the loan disbursing bank/NBFC etc. If this court doesn't, an appeal to a higher judicial forum should be made.

The remedy prayed for in the court should be seizure and auction/sale of the vehicle to recover part of the loan, depreciation taken into account. For the balance loan and interest due, the court prayer should be to allow seizure of movable assets owned by the person receiving loan and thereafter his immovable assets by the loan disbursing agency if the value is not realised with movable assets.

Only if the amount of loan paid plus interest due as on that date is not recovered through movable and immovable assets of the loan receiving person can the guarantor be then sent notice of recovery by the loan disbursing agency.

[aravindhunt]

Originally Posted by whitewing

I understand one becomes liable to make good the defaulted dues, but can one getting arrested for it ? Or was it the police trying to make a fast buck ?

Normally the police cannot arrest a borrower or guarantor, for not repaying a loan, unless there is some maleficent intent to purposefully cheat the bank. Banks normally recover by selling the hypothecated goods (the cost and procedures involved are eye watering), and if the amount recovered are not sufficient to cover the dues, banks may identify other properties, both movable and immovable, and will attach them for recovery.

The guarantor's liability doesn't arise, unless the bank particularly asks the guarantor to repay the loan. Normally banks do this after the loan has turned into a non performing asset (NPA). Remember, no banks want to increase their NPA portfolio, so if a guarantor is asked to repay the loan means, (95% of the cases) the bank has resorted to all possible ways to recover the dues from the borrower without sucess.

[Zinda]

Very unfortunate incident.

I am a firm believer of,

I had money, I had friend
I lend money to my friend
I asked money from my friend
I dont have money, I dont have friend! Period!!

[Gummybear]

No sign, no guarantor, no friend/relatives involved , no loan taken but still I get such calls and messages from bank loan recovery agents.

Story started in 2018, when I purchased a new SIM card, as I was changing my job and I had an official number for last 10 years, which I had to surrender soon( but luckily HR agreed to transfer it to my personal name couple days before my last day).

So, after about 6 months of new number, I started getting calls asking for person named Charan Singh. Which I replied back as wrong number and disconnected.

Later during one such call, lady on other side told me that this guy has taken bike loan of about 70K in 2014, this was his contact number . I told her that I had been issued this number from Airtel in 2018 and I don't even remotely know this guy. But still these calls didn't stop.

They try various tricks, once a lady on other end tried to be friendly to know my details like 'Sir, kya kare hamme call karna padta hai. Mujhe bhi yeh job nahi achchi lagti. Aap kaha kaam karte hai, wahi mujhe bhi job dila dijye'. But when her trick didnt work, tone turned to rude and I disconnected.

Then some calls were even threatening for legal action.

Another time, there was call where True caller displayed POLICE, there also I told about my new SIM card purchase and no acquaintance to any guy called Charan.

About last on year, calls are not there but SMSes keep coming mostly asking to repay loan stating loan amount and loan number or return the loaned vehicle. There were SMSes threatening legal action and then SMSes stating legal notice and asking to meet in some court chamber number on xyz dates. But few weeks after xyz dates, again repeat msgs to replay loan started.

Since I m no where even remotely involved in this loan default case, except for my new purchased MSISDN, so I m ignoring all these communications but I can understand the stress which Rajendra Raut might have gone through. Sad to learn that a life is lost this way.

[kiranknair]

Such a sad situation for helping someone close. Never ever sign any guarantee documents even if it is your close relative if you are not confident of repaying the amount with interest in case of default. However, even after the suicide, the liability still lies with the legal heirs of the deceased. Usually, that is how the guarantee/ indemnity agreements are worded.

[chef-de-jeep]

Had two similar situations that I can relate to in this context. When I newly opened my restaurant in 2013 end, had a bunch of tough looking (maybe 6 of them) guys looking for the owner- jaison. I was with family and introduced myself, though they kept insisting on meeting jaison. They went out and happened to meet the caretaker. Since I was new to the place did not look into it. The guys returned 15 minutes later and asked me where I stay. Since I had nothing to hide I simply told them my address. Turns out the caretaker assumed I was not at the restaurant and sent them to my house. For the 15minutes missing, they had actually walked down to my house and even checked that I had parked a jeep there( this I got to know from the leader of the tough guys). For a fact they were very polite and never misbehaved, it did shake me up a bit and I thanked my stars and parents for not having named me jaison

The second one was where morally I was a guarantor to my relative for a loan given to me and my partner for expansion. Due to unfortunate reasons my partners finances were totally destroyed and it left me as a guarantor for the loan. Took me a good part of 2 plus years to clear the whole mess. Swear to never get involved in such stuff again

[charanreddy]

Similar situation with a close friend.

A friend mr K helped an acquaintance mr A with a bike loan. In fact he went one step further and bought the bike under loan on his name , while mr A used the bike with the promise that mr A would make the monthly payments. The monthly payments did not happen and mr K had his CIBIL score screwed which led to house loan transfer getting declined.

More over the bike was further mortgaged ( no document just physical possession) by mr A to a third party which led to further tension as the bike could be misused in some illegal activity and the responsibility lies with Mr K as it is registered to
Him.

[IP_Man]

Thanks TBHP for promoting threads that spread awareness.

If they take proper legal action, your are bit fortunate because many banks, outsource loan recovery. Those outsourced agencies are nothing but local goons. They can make your life hell.

[Gansan]

A guarantor's signature is not just like a witness signature. He undertakes to pay the money to the bank if the original borrower doesn't. Eveyone signing as a guarantor must be aware of this. When I was doing the payroll in the company I was working in, I have recovered money in instalments fom the salary of employees who stood guarantee to "close friends" who failed to pay the emi to the bank. The bank came after the guarantors with a court order for salary recovery. These were employees of our Bombay branch.

Banks look for additional security in case the original borrower can't repay. They would have obtained security for the loan in the form of immovable property, vehicles, gold etc. And will go after the guarantor only if they can't be sold for some reason. Such as in the case of vehicle loans, when the sale proceeds of the seized vehicle doesn't cover the outstanding loan amount. Then they will recover the difference from the guarantor.

It is all perfectly legal. No use calling banks as vultures etc! Ignorance of law is no excuse.

[Capri89]

Originally Posted by autotranny

I feel compelled to answer lot of these questions, as a banker.

A bit OT, but all the same relevant for loan process of banks.

As a banker please read through the following and clarify.

Recently, I applied for a car loan on my ward's a/c, who is a CG servant.

During the loan process the bank (PSU bank), in addition to the ECS mandate, wanted 4 undated cheque leaves for the EMI amount. I asked the reason behind this illogical request. Here is how the conversation progressed :-

The Banker (TB) - We will use one of the cheque in case the ECS mandate fails.

Me - Why would a ECS mandate fail

TB - If there are insufficient funds it would fail.

Me - In that case the cheque would also bounce when you present it.

TB - Exactly. We can then file a court case for the cheque bouncing.

Me - Why can't you file a case if ECS mandate fails.

Total silence. No answer.

TB - Sir, but that is the procedure.

Me - I am walking away from this deal.

Needless to say the loan was sanctioned without the cheque leaves. But now the banker is insisting that I give these.

[JJ1991]

I work at a psu bank and in 95 percent of loans a guarantor is not required especially in case of vehicle loans. Banks ask for guarrantors in few cases such as a vehicle loan for a college student or farmer without any IT return or any worthy credit report. IMHO do not sign any guarantee document for anyone especially relatives and friends. You will never know who will screw you in the future.

[aravindhunt]

Originally Posted by Capri89

During the loan process the bank (PSU bank), in addition to the ECS mandate, wanted 4 undated cheque leaves for the EMI amount. I asked the reason behind this illogical request.

A cheque is a DPN (Demand Promissory Note), similar to a currency or the stamped paper you sign during a loan release. DPNs comes under Negotiable Instruments Act and failure to honour them is a criminal offence. The return of ECS is also a criminal offence, but since these things are relatively new methods of payment, a little bit of hesitation will be there for the bankers, since there will not be much clarity.

[TallBoy]

Private banks and NBFCs are taking extreme measures when it comes to coercive loan recovery tactics. The goons engaged by these institutions are ruthless. The fintech loan apps in the news are at another level though, with threats of morphed photos and other means of public shaming.

https://www.news18.com/news/india/te...s-5960791.html

NBFCs were recently in the news in Andhra Pradesh for bombarding calls to a minister and ex-minister. Apparently this was being done to make the legislators call the borrower and make the borrower pay, which was ingenuity at another level.

https://m.timesofindia.com/city/vija...w/93224566.cms