I am a student and both my parents have expired. My mom had taken a gold loan and its maturity ended last year we cleared all interest over the loan till January of this year due to covid and not having income source I appeal the bank to auction the gold and provide the remaining amount deducting their dues and principal amount. The bank denied it by saying that the gold loan is under deceased claim and cannot be auctioned.
The gold loan doesn't have nominee placed under it. And i cant clear or pay any more money as i am not earning anything or clear the due. The auction is also denied by the bank . So i would like to ask what could i do in this situation. Can the bank deny the auction when no one is able to pay the interest and principal amount. And the bank is still charging interest over the loan after maturity of loan.
It is not only gold for that matter; Borrower always signs terms and conditions before availing loan which extend liabilities to his kith and kin. If the borrower passes away lender does not hesitate to enforce the relevant conditions to recover principal, interest and penal interest if applicable. Liabilities for legal successors continue even after death if borrower.
