Regarding my uco bank business loan
Joseph Vincent
(Querist) 18 December 2013
This query is : Resolved
Dear Advocates,
First of all- Thanks for your valuable time.I have taken business loan using my original land document from UCO bank,Dindigul from Tamil nadu. Now i have taken EC for my land which was provided to UCO bank for security reason, that UCO bank business loan entries are not there in EC.
Now bank manager is telling that -I will give draft letter and advising me to go to register office to make this loan entry.. for that expenses i need to pay 6000 rupees it seems. I wanted to know why bank manager is telling like that... is it correct or not? I need EC enteries on my land for civil court case purpose.
Joseph Vincent
(Querist) 18 December 2013
Also, Manager is telling...once loan is closed, then you need pay again 6000 rupees to cancel the enteries in EC.
Devajyoti Barman
(Expert) 19 December 2013
The procedure is something unheard of at least in WB.
Take help of local lawyer.
T. Kalaiselvan, Advocate
(Expert) 19 December 2013
The bankers will not bear the registration expenses, it is the individual borrower to bear the expenses of registering the equitable mortgage deed, generally the bankers do not go for registration of mortgage but in case they do, the charges will be included as costs towards the grant of loan, but the registration charges seems to be a little high, instead you can bear the said charges directly by accompanying the bank staff to the registrar office.
ajay sethi
(Expert) 19 December 2013
expenses of Rs 6000 includes legal fees . bank wont foot the bill . pay it
Rajendra K Goyal
(Expert) 19 December 2013
What is EC please elaborate.
In equitable mortgage cases some states are charging for the equitable mortgage effected in their state.
Mutation regarding the charge of Bank in the revenue record need to be noted for equitable mortgage also. Charges for legal search report from lawyer and any other charges are to be paid by the borrower.
In your case pay the charges and get the formality completed.
malipeddi jaggarao
(Expert) 20 December 2013
Mr.Joseph
As you know equitable mortgage need not be registered. Only way of creating equitable mortgage is to deposit the title deeds with the Bank with an intention to create the mortgage. Two essential features - depositing (delivering) the title deeds and such deposit with an intention to create charge over the property.
But this legal aspect in practice changed a little bit - instead of registering the mortgage which attracts heavy stamp duty (as applicable to legal mortgage), the letter depositing the title deeds is being registered with the concerned Registrar's office - this attracts lesser stamp duty/charges.
This practice is roped in due to two main reasons:
a) Not registering the mortgage charge is giving scope for frauds as it will not reflect in the EC.
b) Many State Governments found it as a source of income by levying registration fee/charges.
Now come to your case:
Since it was equitable mortgage, it was not registered with Registrar's Office. It is right.
Now you wish that there should be entry about the charge on your property - Bank is willing to register its charge - This is also right.
Bank Manager advises that the expenses will be Rs.6000/-. This is also right. This amount must be purely registration charges. Bank will not levy legal opinion charges now. It might have already levied legal opinion charges at the time of taking the security. YOu will have to incur again the expenses whatsoever at that time to file satisfaction memo and to get removal of charge in the Registrar's office. This is also right.
There is no grievance in your query. Nowadays even registration of charge of equitable mortgage also became costly affair in many states.
Obtaining loan from the by offering immovable property is costly affair. Apart from the interest other charges are:
a) Processing charges - many banks ask the prospective loanee to deposit this amount upfront. Recurring and periodical every year.
b) legal opinion charges for opinion from an advocate suggested by the Bank from its approved panel. - one time
c) Valuation of property - approved architect. - one time
d) Inspection charges - this is recurring and periodical.
e) Insurance - recurring and periodical.
f) documentation charges - recurring and periodical every year upon on annual review.
g) pre-closure charges (some banks levy these charges - some banks not).
h) Penal interest - for default in repayment.
i) commitment charges - for not utilizing the limits if the loan as sanctioned as running facility like Secured Overdraft/Overdraft/Cash Cash Credit.
......and so on. No end to this list as new generation banks are inventing ways to increase their income taking advantage of the borrower who is in need of finance. They will not appraise all above at the time when the customer approaches them!.
In your specific case, the Branch Manager rightly advised you.
Raj Kumar Makkad
(Expert) 21 December 2013
I do agree with the advice as given above.
Joseph Vincent
(Querist) 23 December 2013
Hey... really super expert you all are...thank you very much for the advises..
by Joseph
Wish you Happy Christmas and new year 2014
