Education loan dispute

This query is : Resolved 
 

(Querist)
05 September 2016

I had a loan of amount Rs 4.0 lacs from PNB kanpur branch in 2006 to furnish my higher education. At that time the said ROI was 10% which later became 13.5%.
I completed by education in Aug 2010. I got my job in 2011. I was asked to pay Rs7000/- as EMI which I paid. In 2012 I had to go for higher studies and hence during that period I could not pay the EMI as I was not getting any salary so I requested the branch manager to provide me little grace time so that I can repay it properly. But that was denied . in 2013 April I got good job and I asked bank about EMI they asked to pay the emi of Rs.10015/- which was paid from my end on a regular basis without any lapse till march 2015. I got NPA notice in dec 2015 and asked to deposit the due interest (might be for period of 1 year on when I was persuing MBA). I deposited the same amount.
As per statement in Feb 2011 the outstanding principal was Rs 3.95 lacs and interest was Rs 1.33 lacs. In march 2011 principal remains same (Rs. 3.95 lacs) and interest increases to Rs 2.66 lacs.
My father went to branch to know the exact EMI which I needed to pay but all time he was sent back without providing any information and asking him to visit again and again. Since 2010 I dint know how much is my EMI and tenure
I called customer care as well they told me that My EMI is Rs. 4958 only which makes no sense as My outstanding was so heavy. I was told by the manager to pay the lump-some amount as EMI's until I come to know exact EMI amount and tenure.

Then finally I wrote to bank via email to know the exact emi and tenure but no response then I sent reminder . In april 2015 I received a letter only stating the lower emi some 5k + amount that too with out any tenure(The letter is lost some how from my end) Then I decided not to pay EMIs until i get correct information from bank and same I wrote to bank. Meanhwhile My father was asked to pay some odd amount to get the account out of NPA(for bank perspective) and was promised for settlement b. He paid the money time to time but no support from bank side. Bank is sending letter for recovery and saying amount 5.3 lcs+interest howvever I had already paid 3.8 lacs need guidance to clear this as I want to repay but with this kind of amount not possible as my 50% salary goes for other Emi +rent and all.I took PL to settle the amount but no support from PNB bank. Kindly suggest what can be done. I stopped paying because of casual behaviour from BANK. They have sent a notice to bank where I work for recovery.







dr g balakrishnanOnline (Expert)
06 September 2016

Issue a legal notice u/s 80 ask there why you cannot move liquidated damages for posting your account NPA?
secondly ask the bank why they could not supply correct details inspite of several personal visits by you father? why you cannot move for defamation?
whey the bank could not supply information inspite of the fact you took some education loan, if they cannot maintain a/c properly why they in the first place lent you a loan, if they had bot you could have gone to some other bank which can maintain some proper accounts....ask why you could not move a judicial review under article 226 r/w 227 on bank's education loan lends.
you say you need prompt reply in 60days u/s 80 pf CPC 1908 if not recd you would move the high court relevant in the matter besides.

P. Venu Online (Expert)
06 September 2016

The interest rate for Educational Loans upto Rs.4 lakhs is at the Prime Lending Rate.

Raj Kumar MakkadOnline (Expert)
06 September 2016

Move a detailed complaint to Banker's ombudsman of the area and only thereafter issue legal notice and take further legal action accordingly.

Rajendra K Goyal Online (Expert)
08 September 2016

1. Have you asked for the account statement from Bank from time to time?
2. Have you asked the installment rescheduling and rescheduled EMI from time to time from Bank in writing?
3. Have you tried to calculate what monthly interest is being debited / total interest debited?
5. The interest become principal after every month and interest is compounded, not segregated as interest and principal in regular / otherwise accounts.

Rajendra K Goyal Online (Expert)
08 September 2016

1. Read RBI guidelines on NPA (Asset classification) procedure available on site.

2. If at any time few installments not paid in term loan, account has to be identified as NPA as per RBI directives.

3. Account once classified as NPA cannot become regular if it does not remain regular for some time (probably one year) after regularization. Your account was never regularized.

4. Interest cannot be debited in NPA account till actually realized / received.

5. Amount deposited in NPA account is first used to satisfy interest due but not debited.

6. Bank has to classify NPA account as loss asset after particular time. Due to higher provisioning norms Bank try to prevent such conditions.

Rajendra K Goyal Online (Expert)
08 September 2016

You said:
In 2012 I had to go for higher studies and hence during that period I could not pay the EMI as I was not getting any salary so I requested the branch manager to provide me little grace time so that I can repay it properly.

Reply:

Bank was not concerned whether you received the pay or not. Their amount needed to be returned as per promise / agreement signed in writing. There was no reason why Manager should recommend for the same. Due to your default, it seems loan was NPA.

Rajendra K Goyal Online (Expert)
08 September 2016

You said:
in 2013 April I got good job and I asked bank about EMI they asked to pay the emi of Rs.10015/- which was paid from my end on a regular basis without any lapse till march 2015. which was paid from my end on a regular basis without any lapse till march 2015. I got NPA notice in dec 2015 and asked to deposit the due interest (might be for period of 1 year on when I was persuing MBA).

Answer: You should get the account statement and verify all calculation, merely not accepting verbal communication, ask Bank to rectify any discrepancy, if found, move to consumer forum if not rectified. (My experience says, there may hardly be any calculation mistake).

Rajendra K Goyal Online (Expert)
08 September 2016


You said:
As per statement in Feb 2011 the outstanding principal was Rs 3.95 lacs and interest was Rs 1.33 lacs. In march 2011 principal remains same (Rs. 3.95 lacs) and interest increases to Rs 2.66 lacs.

Reply:

Get statement, get all calculation checked. Roughly with this rate of interest 2.5 to 3 time amount of loan need to be paid to Bank in 10 years (loan is of 2006). If Bank does not give account statement approach higher authorities / use RTI.

Rajendra K Goyal Online (Expert)
08 September 2016

You said:
Then finally I wrote to bank via email to know the exact emi and tenure but no response then I sent reminder . In april 2015 I received a letter only stating the lower emi some 5k + amount that too with out any tenure(The letter is lost some how from my end)

Reply:

You should have tried to know your exact liability and exact irregularity in the loan account as on date through letter / hard copy, and have regularized your account first.

Rajendra K Goyal Online (Expert)
08 September 2016

Then I decided not to pay EMIs until i get correct information from bank and same I wrote to bank. Meanhwhile My father was asked to pay some odd amount to get the account out of NPA(for bank perspective) and was promised for settlement

Reply:
It is your mistake, your liability would go on increasing, your credit score / credit history is being adversely effected, thus making it difficult to get loan in future.

Rajendra K Goyal Online (Expert)
08 September 2016

You said:
I stopped paying because of casual behaviour from BANK. They have sent a notice to bank where I work for recovery.
Reply:
Bank has provided you finance for your studies, If Bank was casual, you should have returned its money in time and prove yourself as sincere. You should have written to higher officers if Branch was not cooperating rather to stop repayment of loan.
How a lender can be stopped in taking steps in legal way to recover its dues by sending notice to your office address.

Dr J C VashistaOnline (Expert)
10 September 2016

Submit your reply to the questions raised by experts, otherwise, the query is deemed to be closed as not interested.

nishi (Querist)
10 September 2016

Dear Dr G Balakrishnan
Can you please share the link for 226 r/w 227 on bank's education loan lends as I tried but could not get it

nishi (Querist)
10 September 2016

Dear Mr Goyal,
I know that its not bank's concern whether I am getting pay or not. They lent me and now I have to pay.

I did not ask about statement until it came to notice that account was turned up into npa.

You said
"Account once classified as NPA cannot become regular if it does not remain regular for some time (probably one year) after regularization. Your account was never regularized."

Question: The time frame is 1 year and I paid EMi of 10015 for 24 months then how come it was not regularized?

For
"You should have tried to know your exact liability and exact irregularity in the loan account as on date through letter / hard copy, and have regularized your account first.

Reply"
There I made mistake since it was new job for me and I was busy in that I asked my father but all were done verbally. But there must be some solution for that. I had always paid lumpsome money time to time to make it regular as suggested by BM of PNB

Reply:
It is your mistake, your liability would go on increasing, your credit score / credit history is being adversely effected, thus making it difficult to get loan in future

My Reply:
I dont need any further loans but same needs to be rectified as I cant pay any odd amount all the time as demanded by BM in qtr ending. Branch was not taking interest in telling me exact EMI

Your reply"
Bank has provided you finance for your studies,(I am still greatfull) If Bank was casual, you should have returned its money in time and prove yourself as sincere( I was paying regular Emi from 2013 to 2015 as soon as I got the job which I told earlier).

You should have written to higher officers if Branch was not cooperating rather to stop repayment of loan.

:- I called Customer care I made complaint to head office . My father visited many times to nodel offices several times in a week for settlement but no one bothered to respond

How a lender can be stopped in taking steps in legal way to recover its dues by sending notice to your office address.

I am not asking to Stop them from taking step.

I am seeking information that
1)Isn't it bank's responsibility to tell the exact emi for repayment
2) Why they did not bother about settlement
3)what were they waiting for . Till 2015 they did not bother to send a single communication for emi untill I raised the Issue?
4) Am I the only party who is responsible for all these things?
5) Is bank not liable to provide support or guide to settle the loan
6)Why they ask my father to deposit the only some part of money to make it regular only at qtr ending?

request your view on same.









Kumar Doab (Expert)
11 September 2016

The bank and banker is liable to supply all requisite details and statements.



The bank and banker are known to claim as per their dispatch register the letter was sent by ordinary post.



Did you register email id?



You intend to find defects with stance of bank!



You may approach a very able counsel specializing in banking/consumer matters with all record (whatsoever) you have.



Guest (Expert)
11 September 2016

Ms. Nishi,

Your questions are quite valid, but you have the need to struggle hard in a systematic way to fight for justice.

Once you become defaulter and your account becomes NPA, every thing will go against you irrespective of the fact that you have already paid a substantial amount. No court will listen any of your plea, being a defaulter.

So, in order not to get defaulter, my advice is to continue paying the EMIs, while you start pursuing the case at first with the higher authorities of the bank and only thereafter, when you are able to get instances of irregularities on the part of the bank, you may take up your case with the Banking ombudsman.

Unless you adopt these courses of action, you may not be able to get sufficient evidence against the bank and even if you give legal notice under CPC 80 that may go futile.

Neither merely a legal notice, nor your decision to fight the case legally without sufficient evidence can become result oriented. Justification of your law suit would be possible only if the banking ombudsman also turns down your case.

Before that, it will be wise on your part to properly study the education loan policy of the PNB vis-a-vis the instructions of RBI to make yourself fully aware about the education loan system by the banks.

I am sure, if the evidence is strong enough in your favour, on fighting the case systematically, you are likely to achieve your targetted success.

nishi (Querist)
11 September 2016

Thank You Mr Dhingra for suggestion.

I stopped paying EMI after informing the bank. In email which I wrote to bank on feb2015, clearly mentioned that If I dont receive the details of EMI and tenure I will not able to continue. Still I paid the emi till may2015 but when I did not get proper revert after 3 months I stopped.

If I am not getting wrong, You are advising me to pay the due EMIs first take up the matter with banking ombudsman .
BUt Its being one year I have not paid any things except 17-18k as asked by BM to make account regular.

I have few letters sent by bank with odd EMIs.

And If I starts paying ,How will I fight again?

Because I am from middle class and living in Mumbai. If I had intention to default I wouldn't have paid any amount nor make any contact with bank. BUt I am still in contact with bank and negotiating for settlement but they are not ready. I have written a letter for settlement but did not get reply from them

Request you to suggest me way step by step to come out of this situation.
I want to make it clear that I want to repay the loan but not any odd amount so Is there any way to settle this

Regards



Guest (Expert)
11 September 2016

Dear Ms. Nishi,

I expressed my opinion based on the description of the problem. You have to pick up the clue to proceed further. Detailed advice can be possible only on examination and analysis of the case related documents, if you have.

If you don't want to pay the EMIs, you may use your own wisdom after weighing pros & cons of your default by taking in to consideration of its after effects that may make make your account NPA resulting in to creation of bad credit rating to appear in the CIBIL record, thereby resulting in to your becoming ineligible for any loan from any bank or financial institution for the future.

So, if my suggestions do not look feasible to you, better use your own wisdom or contact some expert by taking personal appointment and discuss the issue threadbare with him by showing him all of your case related documents for his examination and advice.

nishi (Querist)
11 September 2016

Dear Mr Dhingra,

Please don't take me wrong. Its very well feasible.I was just clarifying that whatever I understood ,was right.
My father is visiting bank tom and will discuss the same.

Regards

Kumar Doab (Expert)
11 September 2016

The verbal transactions are not on record.

If you were not satisfied with BM then Bank has its well advertised escalation matrix.



All said and done you may prefer to approach a very able counsel specializing in banking/consumer matters with all record (whatsoever) you have.



The CIBIL record can be corrected by directions from say DCDRF after the negligence/deficiency/transgression of bank/banker is proved.

Rajendra K Goyal Online (Expert)
22 September 2016

You said:
The time frame is 1 year and I paid EMi of 10015 for 24 months then how come it was not regularized?

Reply:
Again and again you are talking of EMI, Bank is concerned with irregularity in loan account, NPA concept as per RBI directives is linked with irregularity in the account not payment of EMI. Instructions are from RBI, Bank has nothing to say in it, only to comply. Please do not link EMI with irregularity. Account become regular only if after clearance of irregularity it remains regular for one year. Your EMI would have been fruitful if you once have cleared full irregularity. You should have confirmed from Bank whether after 24 EMI it is irregular to what tune?

Rajendra K Goyal Online (Expert)
22 September 2016

You said:

There I made mistake since it was new job for me and I was busy in that I asked my father but all were done verbally. But there must be some solution for that. I had always paid lumpsome money time to time to make it regular as suggested by BM of PNB

Ans:

You are accepting your mistake, rather to correct that you are explaining, which would not benefit any. In spite of sending father or talking to call center, you should have dropped / sent letter through your father with reminder to ask for your account statement from Bank. You are trying to find fault with Bank, but not obliged to see your shortcoming in dealing your loan account.

Rajendra K Goyal Online (Expert)
22 September 2016

You said:

I dont need any further loans but same needs to be rectified as I cant pay any odd amount all the time as demanded by BM in qtr ending. Branch was not taking interest in telling me exact EMI

Ans:

You have mistaken in stopping payments, you should have cooperated with the Bank, your problem would be half solved.

Rajendra K Goyal Online (Expert)
22 September 2016

You said:

I called Customer care I made complaint to head office . My father visited many times to nodel offices several times in a week for settlement but no one bothered to respond

Ans:

Bank has its own process to settle, No employee would take risk in absence of definite written request, to show any interest in settlement of loan account out of turn to invite a scandal in public sector Bank.

Rajendra K Goyal Online (Expert)
22 September 2016

You said:

1)Isn't it bank's responsibility to tell the exact emi for repayment
2) Why they did not bother about settlement
3)what were they waiting for . Till 2015 they did not bother to send a single communication for emi untill I raised the Issue?
4) Am I the only party who is responsible for all these things?
5) Is bank not liable to provide support or guide to settle the loan
6)Why they ask my father to deposit the only some part of money to make it regular only at qtr ending?

Ans:

1. It is joint responsibility to try to keep loan account regular. Borrower should have taken internet Banking / account statement to continuously follow up the account. EMI once fixed may change, installment due on first day of month is deposited on last day of the month. As interest is applied on daily basis.

2. They have their own process, have you given proposal in writing to be forwarded to designated officer for decision.

3. Bank may not spare the concerned officer for in-activeness in recovery. This does not end the responsibility of borrower. You have accepted Manager contacted your father.

4. You should have paid back as per agreed terms.

5. Bank depend on written agreement / security papers, anything violated may be in your benefit, but you are responsible for not observing the terms of loan agreement.

6. The balance sheet is prepared every quarter at Bank level and at Branch level, to drag out the account from stressed asset, this may be is a try / step.



Guest (Expert)
22 September 2016

You may better approach the banking ombudsman to solve your problem Before that if you go for any legal action, you may be damaging your own case.

Even legal notice may stiffen the stand of the bank officials against you.

Kumar Doab (Expert)
22 September 2016

Expert have resolved your query.


Approach a very able counsel of such caliber to take the matter further.

Rajendra K Goyal Online (Expert)
25 September 2016

Respected expert P.S. Dhingra sir,

I doubt, Banking ombudsman would extend any relief, the account is willfully defaulted. One can not be allowed to be benefited for his own fault.

As mentioned, the interest may have been just double the principal due to attitude of borrower by not paying even if having capacity.

Either he should wait of any interest waiver scheme of the Bank or should submit one time settlement proposal to Bank, provided Bank agrees.





Guest (Expert)
25 September 2016

It is up to her to justify, if she thinks that she has been overcharged.

So far as her default is concerned she cannot escape legal action.

Kumar Doab (Expert)
26 September 2016

The author may approach a very able counsel specializing in banking/consumer matters and get out of the mess.



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