Loan settlement for cash credit loan for Pvt Ltd Company

Querist : Anonymous (Querist) 19 March 2010 This query is : Resolved
Dear sir,

I like to get an advise from you. As my father who was an MD of an Pvt Ltd company formed by him and two other directors one of whom is my mother and another is outsider till my father passed away in mid 2008.

The business was located in the premises of my father's owned land and house.
This business have a cash credit loan of 35 lacs ( 34 lacs fixed deposit against 79 lacs loan amount already diluted by bank) now the business does not run, unit is closed but we have this loan of 35 lacs in NPA state.

We dont have enough fund (maximum 15lacs available) to pay this amount before closing the business.We don't want to loose our property or personal kinds. My mother is suffering from cancer and I am a salaried person not involved in this Pvt Ltd, family business.

Bank is not ready to settle the amount anyway in in our available fund( 15 lacs).

Please advise.

22/03/2010:
I just wanted to add few information:
1. This cash credit loan had no security/mortgage(only the spare parts which is already liquidated) involvement...only had personal gurantee.
2. The business is currently not runing/will no one run in future.
3. The business is located in our residence premises.
4. The business A/c has only 15 lacs to settle the loan of 34 lacs.

Now please advise the following:
1. How could bank proceed for recovery?

2. How could we can protect our residence/land spending the available business fund only?

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nishad (Expert) 19 March 2010
settlement is hard to come with that 15 lacs my friend......if the company is still running and earning income,then probably you can pay certain amount and get the account regularized to come out of NPA...and then you can probably talk about the debt restructuring to get some window period and also you can negotiate on the ROI......finally my advise would be to pay off the debt at the earliest before the bank starts their recovery proceedings..

Raj Kumar Makkad (Expert) 20 March 2010
Your quarry has duly been resolved and this is repeated only

Prakash Yedhula (Expert) 20 March 2010
See whether any OTS Scheme promulgated by RBI is applicable to your case. Otherwise, there is no legal right to seek the bank to settle at your terms. And banks normally do not agree to settle for a lesser amount if the security is worth more.