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Manu (engineer)     01 March 2010

Education loan

Hi, i need some information on a npa account. i'll explain the thing in detail to you and expecting a correct movement in order to finish this. I have taken a educaional loan in 2001 for my engineering. The loan amount comes to 2.6 lacs rupees in principal at the completion of my enginnering, As i belongs to a poor family background and not having the job for a longer period of time, i was unable to pay it. Now it has been declared as a NPA account by PNB from a period of over 2 years. It has now total of 4.18 lacs including interest before declaring it as NPA. So wat  measures can be taken to do settlement of it. i am willing to do the settlement but i can pay maximum of 2-2.5 lacs. My entry is there in CIBIL also. I am enable to get any further loans from any bank. Please help me out of this.


 32 Replies

aruntrivedi (lawyer)     01 March 2010

taking loan from other bank will not solve your problem. better you approach PNB recovery section AGM or Law officer - show your preparedness to pay as much as amount you can pay. they are very amicable will come with proposal which is very lucrative and it can solve your problem. for balance amount you can ask for installments. If you are somewhere in gujarat contact me I may accompany you and can approach PNB as my one of associate collegue is panel advocate for PNB gujarat region.

Parthasarathi Loganathan (Advocate)     02 March 2010

Hats off to Trivedi Saab for giving the correct opinion.  I wish to supplement here that there are several amicable tools prescribed by RBI to settle your dues which had mounted beyond your control.  Now since you have come forward to repay the NPA, no banker would hesitate to extend red carpet welcome to such sincere borrowers.

1 Like

P.K.Haridasan (Advocate)     07 March 2010

  Happy to see the Reply of Trivediji . The Forum can be proud of  having  such personalities. 

1 Like

Magic Leo (entertainer)     17 December 2010

Dear Trivedi ji,  I am also going through the same situation as Mr. Manu also going on and my amount is pretty big too. My loan was about 7.5 lakhs and I paid 5.5 Lakhs already but still the Banks is saying I need to pay 7.5 lakhs and now since I was not able to pay they have considered my loan as NPA and sent me a notice. I appeared for the call from the bank, I pleaded to them that I am not able to pay since I m not having a job. then they were thretening me that they will recover my loan from my fathers salary who is a government servant which will effect my parents household expense since he has signed as a co borrower. so my enquiry is that does the bank have to right to recorver loan from my fathers salary and also can they release money from my husbands bank account without informing because they have already taken money from my mothers account since she is a guaranteer. my husband also earn that much only meet the expense of to lead a normal life. kindly pls advice me can the bank take such nasty steps. As far as I could pay I paid them I am in ghaziabad can you suggest some one who can support me to solve this problem. I too got the loan from PNB only.

Thannks in advance Richa

aruntrivedi (lawyer)     18 December 2010

As you have informed that money are taken from your father's salary since he is co-borrower is also bound to pay. mother is guarantor who is also bound to pay. No execuse you have no income and unable to pay law do not permit that way. Against equitable or registered mortgage of property hank is powers to realise their dues from the sale of property which have been mortgaged or offered as security. If they are doing so their all steps are legal no remedy. Remedy only is to pay minimumm amount towards your dues. If I take loan from you personally and I may say that am unable to pay said loan since I am jobless, is it legal. It may happen that I may obtain loans from somany and then after taking money I will give up my all job and then would say that I have no money or income to pay. For amicable solutions have meeting with bank officials and go for either settlement or payment of full amount even in installments that is the correct remedy. They have powers under Banking regulations Act to set off their due amount from your any of accounts. One way I suggest that your father or father in law who is government servant should withdraw sizeable amount from his pf and then pay sizeable due to bank in that case their steps on your property shall not be taken. Since your father is also a coborrower he must pay these dues like this so as to save the property.

Manu (engineer)     18 December 2010

Thanks you all. i ahve cleared my dues by doing a 1 time settlement. Thanks for ur advices and responses. Thankyou so much...

Kumud (self employed)     03 February 2011

Dear Sir,my regards to you,sir i also availed a education loan in 2005 for my higher studies from canara bank of Rs 2.75lacks and i payed few of my installments also but due to the recession period,i lost my job then i had a break of 1.5 years since i did'nt deposited my installements,on 23rd jan 2011 i recieved a letter from bank that please come to the bank for the renewal of your loan account,two days later i went to the bank and had words with bank manager,i told him about my status that i am ready to pay my loan amount,but he told me that the bank is filing a suit against me,and then after few minutes of talk between us he told me to sign on a document in with there were many revenue stamps at the bottam,i requested that as i am not that financially strong right now to pay my out standing which as of now is Rs 4.0 lacks please arrange some settlement option to me,he told that as per RBI guidline there is no settlement offered against education loan,so is he right or should i approach higher personall in the bank.Please suggest something to me


Manu (engineer)     03 February 2011

Hi...call me @ 9741557557 . i can only tell what way i have moved....u can also do the same if u like it...

is ur a/c is NPA or not...??

Parthasarathi Loganathan (Advocate)     04 February 2011

Mr. Kumud.  There is nothing to worry at this stage as bank should have only revived documents by taking a Revival Letter from you keeping in view of the provisions of the Limitation Act. Since you have the right intention to repay the loan, banks will generally encourage and support your obligations and contraints faced now.  Please approach the controlling office of the bank alongwith the branch manager for amicable settlement to rephase your loan with fresh terms and conditions of repayment.  All the Best.

Kumud (self employed)     22 February 2011

Hi Manu,

Please suggest me something that i can do,so that my loan liablity is released,Yesterday i went to meet the AGM regarding this,initial first 5 minute i told him about my situation,then he told me to wait for 1 minute outside his cabin,after having words with the branch manager then he called me again and this time it was totally different communication,he told me that you account has been decleared NPA nothing can be done now either you can go for OTS or bank will take a legal action against you.I am also having a good knowledge of Banking sector but i pretended that i m not,he tired to scare me.My total amount outstanding is 3.80 lacks ,the AGM told me that OTS will around 3.30 lacks payed in 3-4 installements.How much amount i can negotiate for settlement?.Because i don't have that much money to pay.Please tell me and the mode of payment do they agree for installments.and also please let me know the steps to be followed during the procedure because i have heard that the bank people are very clever some time they take the money and Do not give NOC.

Please take me out of this mess.help me.........

Syed (Student)     23 March 2011

Dear Sir,

Sub: Personal Segment Advance – under education loan scheme – term loan of Rs. 300,000 borrowed from State bank of Hyderabad, Masab tank, Hyderabad branch.

I wish to inform your kindself the following for legal guidance and your esteemed opinion.

1.       The Education loan was taken in two installment @ 1.50 Lakh (on 5-7-2006) and Rs. 1.50 Lakh (01-01-2007) for higher studies (M.S.) @ 11% interest per annum.

2.        Accordingly I have fulfilled the purpose of loan and successfully completed my M.S. from Sweden in 2008 March.

3.       As per agreement repayment of loan commences one year after the completion of course i.e., March (2+1) =3 years moratorium 2009.

4.       The loan is sanctioned on the basis of a 3rd party guarantor.

5.       Unfortunately up till now I could not secure a salaried job. I am doing some odd job work hardly sufficient for my livelihood and parents care.

6.       Nevertheless I have arranged some money and repaid about Rs.70,000 in various installment as and when I could afford.

7.       But since last five months the bank agreed upon an amount of Rs. 4050 as an EMI on regular basis and it is being directly deducted by the bank from my Father’s pension who is a senior citizen and heart patient.

8.       Now the bank in spite of accepting monthly regular payment of Rs.4050 issued a legal notice for the recovery of accrued interest of Rs.164,000 (as an interest from the date of the sanction of the loan i.e. 4 years 11% some where equal to 164,000 with penal interest).

9.       The bank has informed that the loan is repayable in 90 months @ Rs 4050 EMI.

10.   It seems the bank has not considered the Moratorium period and imposed interest from the date of sanction of the loan 05-07-2006

The serious concern is that the interest should be levied after completion of the course added with one year grace period  but my bank is charging the rate of 11% interest from the date of the sanction of the loan and the total amount us as below: -

Loan Amount – 300,000

Interest 11% for – 165,000


Total due              4,65,000 (As per bank notice)

 Although occasional payments around Rs. 70,000 before the commencement of regular EMI of Rs.4050 since last four months but still I have been given a notice for paying Rs.165000 in total 7 days and failure do it legal action will be taken against me.

So, I want your kind help in this regard. How I could settle this matter and how my interest will be deducted.

Yours truly,


aby (nona)     25 May 2011

Dear sir,i took n amnt of 4L from canara bnk.....now they say i need to pay 8L.....plz reply i m vry much frustated,,,,tetll mde how i can settle the loan 4L or below,

RAJU O.F., (Advocate)     26 May 2011

Once an account is classified as NPA, bank will/can not debit further interest in the said account. Further, every year bank has to write off certain percentage of loan amount, thereby after few years under NPA, the net balance in the account would be nominal, say Rs.100/-  So whatever is recovered later, is directly taken to their profits.

Defaults  under educational loans is a major problem for banks as well as the beneficiaries of loans, if jobs of sufficient salary not achieved.  The problem has to be addressed at political levels, for suitable packages to banks under subsidy or waiver or other ways like agricultural loans.

There is no hard and fast rules for OTS (one time settlement ) of bank loans.  Individual banks have discretion to waive interest portion. Hence apprise the bank officials your practical problems and try to get the portion of interest waived and also to reschedule the loan instalments. 

Vijay (PM)     22 June 2011

My father stood as guarantor for our education loan (Rs. 90000/= and Rs. 30000/=) for which he deposited our house documents which was on his name with SBI. He passed away in the year 2006. We had cleared the loan in the year 2008 upon mutual understanding with the bank. Loan closure letter was given to us which states “The documents can be handed over to the borrowers upon acknowledgement”.


The bank is now making us roam to hand over these property docs. My father (Guarantor) was an employ of SBI and my mother is pension holder from the same bank till date.


Even after submitting Death Certificate original, Affidavit – Cum – Indemnity (Form V) Stamped Rs. 100/=, Family member certificate (Attested Copy), Government employee salary certificate as Surety and two id proofs of two Deponents and Letter of disclaimer (On behalf of my mother) the bank is not ready to give the documents.


Can we get this legally solved?

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