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Personal Loan -Interest rate

(Querist) 06 June 2008 This query is : Resolved 
Respected Learned Friends,

A Hong Kong based private bank had entered into a personal loan agreement with my client for a sum of Rs.25,000/- at 39 % of interest p.a . After deducting the processing and other charges , a sum of Rs. 23,899/- was received by my client and as per the agreed repayment schedule , the loan is to be repaid by way of 36 EMIs of each RS.1404/-
After a successfull payment of 9 EMIs (ie Rs.12,636/-), the Bank called him over phone to 'top up' the said loan and The loan is now 'topped up' in the following manner!
1. Out of total 9 EMIs , a sum of about Rs 9500/- is said to be repaid towards the interest! The rest of the amount has been magnanimously deducted from the loan amount!!
2 . By a fresh personal loan for the amount about RS.33,000/- is sanctioned to him and after pre-closing the previous loan amount, theremaining about Rs.10000/- by way of Cheque has been issued to him!!!
3. Be kind enough to have a look on the schedule of repayment - 40 EMIs of Rs.1680 each!!!!

Learned Friends , I invite your valuable opinions.

R.S.Rajesh (Expert) 07 June 2008
Please note that the bank shall not be entitled to charge the interest over and above the contracted rate/document rate,which is agred upon by your client as per the documents executed infavor of the bank which need to be verified.

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