Kcc loan payment after death of owner

SHAILESH VERMA (Querist) 23 May 2023 This query is : Resolved
Sir,
My grandfather had a KCC loan(in PNB). He died few years back. The loan has become NPA. The property has inherited legally to all his 4 sons. Now 3 of them are willing to close the loan by paying their share, but 4th one is avoiding and saying that he will not pay any amount. What can be the the legal proceedings in this case. Can the loan amount be divided into 4 parts and individually be allocated?? My father has asked the Manager of bank to divide it in 4 parts so that each individual should pay his share, but Manager denied that there is no such provision. Or what can be the legal procedure in this matter??

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When a KCC loan borrower passes away, the entire loan amount becomes due, even if the property has been legally inherited. Banks typically do not allow the loan to be split among legal heirs. If one heir refuses to contribute their share, the other heirs may have to pay the full amount and then seek legal recourse to recover the outstanding portion from the non-paying heir. It's advisable to get an undertaking from the reluctant heir before settling the loan.

Sudhir Kumar, Advocate (Expert) 23 May 2023
There is no provision of division of loan and the bank (as you said) has already denied the same.

Now the loan has to be paid in entire. the one who is not paying can be sued by remaining three subsequently.

Advocate Bhartesh goyal (Expert) 23 May 2023
Yes, loan amount can't be divided it has to be paid entirely to bank either anyone of you or together.

kavksatyanarayana (Expert) 23 May 2023
Yes. Agreed with the above learned experts.

Dr J C Vashista (Expert) 24 May 2023
Well opined and advised by experts.

T. Kalaiselvan, Advocate (Expert) 25 May 2023
From where did you get this idea of splitting the loan amount by the legal heirs of the deceased borrower.
The loan has to be discharged in full after which the so called legal heirs have to produce the death certificate, legal heirship certificate and a letter to the bank to close the loan amount and give a certificate for no dues and to hand over the title documents to all the legal heirs after everyone signing the receipt.
The property cannot be inherited before the closing the loan against the property.
If one of the legal heirs is expressing his inability to contribute for the discharge of his share of loan amount, then someone among you should get an undertaking from him and pay his share which can be collected from him at a later date after the entire process is completed.

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