Education loan repayment

Niket (Querist) 20 March 2013 This query is : Resolved
I have taken an education loan from Syndicate bank of less than 2.5 lakh, and was aware that no security is required except for parents guranteefor loan below 4 lakh. however as it was extremly important to me then , we agreed with the bank to also keep a LIC policy with them of around 1 lakh as gurantee. It was explained to us that as that is not a mandate as per govt law, it is only for the purpose of getting the loan approved, and the same will be given back to us on maturity.The maturity date being before the completion of loan repayment date. Currently i have only about 60,000 due to be paid to the bank and they have nicely stacked our LIC maturity sum which got paid this year. On contacting the bank to release the amount, thay said they cant do so and there is only one option of getting the loan settled with the LIC, amount. i have been paying all my EMi's on time and have always paid all the amount on time. I do not understand how they can go back on there words, only because all the initial staff who gave the loan have left. Kindly help me to understand if i can charge the bank to pay my LIC amount, while continuing to pay my EMI's as earlier, as this money belongs to my parents. Please help.Let me know if you need any more information on this to guide me. Niket-9765900094

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Devajyoti Barman (Expert) 20 March 2013
This is gross unfair trade practice. File a consumer case. You would get compensation and your LIC money.

Advocate Sastry (Expert) 20 March 2013
Dear Niket,
You stated as under:
"we agreed with the bank to also keep a LIC policy with them of around 1 lakh as gurantee."

Please tell and request the bank to keep the maturity proceeds of LIC policy as a fixed deposit (to be kept as security) since your track record of repayment is good. Tell them not to appropriate the LIC proceeds to the loan account. The fixed deposit to be released after your full repayment..

V R SHROFF (Expert) 20 March 2013
Act , request Bank, as advised by Adv Sastry, if it work, it is fastest w/o any litigation,
Otherwise complain to consumer forum, suggested by Adv Barman.

Adv k . mahesh (Expert) 20 March 2013
when only 60000 is pending and you are paying regularly to the bank how come they had taken the 1 lakh LIC bond maturity amount
as said above discuss with the bank and settle if not then go to consumer court