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Ravi K (Service Manager)     30 May 2011

Personal Loan Settlement

Hi Sir,

I am RK and experiencing huge trouble in view of my Personal Loan Settlement from major private bank. I got a personal loan of Rs. 1,00,000/- in the year 2004 and since then I had paid some 5-6 installments regularly through ECS. However, since my job was lost I was unable to pay the rest of the EMIs till date. Now the bank has approached me and asking to go for Full & Final Settlement of Rs. 1,15,994/- in 2 installments after around 6 years. They haven't threatened me however they are calling me every now and then asking me to make the payments before June 2011.

I received the copy of the settlement letter through courier from them however I have not acknowledged it yet and I have not yet returned my acceptance apart from what I did on the phone calls. Now I am finding it difficult to make this payment in only 2 installments. One this month before May 31 and one more before June 30, 2011. I am worried if there will be any legal implication of not settling the amount within the time specified.

Please suggest how shall I go about it since I am in a new job now and cannot accumulate this much of money within short span of one month.

Your urgent suggestion and feedback on this is much appreciated.

Thanks & Regards,



 9 Replies

adv. rajeev ( rajoo ) (practicing advocate)     30 May 2011

It is better to have a discussion with the bank authroities and propose for the one time settlement, if they agreed then take time to repay it as per the one time settlement agreement, normally if bank agrees for the OTS they wont give instalments are time to pay it,

To recover the dues they may file suit for recovery of money.

1 Like

Ravi K (Service Manager)     30 May 2011

Rajoo Sir, Thank you very much sir. I have proposed them that I will be able to settle the amount in three installments in July, August & September however they are asking me to settle it down in 2 shots only. Kindly suggest. Also, will there be any criminal charges against me?

Thanks a lot.

prabhakar singh (advocate)     30 May 2011

No! there will be no criminal charge against you as releation between you and your bank is that of a debtor and creditor.But certainly there is civil liability on you to discharge the debt by paying off it on terms agreed between you and failure to do so on your part may result in filing of suit of recovery of principal and interest in which case you shall be liable to pay the cost of suit also including court fees paid which may go up to about 10% of due amount depending up on the state of which the matter is.

Ravi K (Service Manager)     30 May 2011

Hi Prabhakar  and Rajoo Sir,

I am in Bangalore which falls under Bangalore Civil & High- Court Jurisdiction. Actually I have not yet signed and acknowledged the receipt of the Settlement Letter sent by one of the Debt Settlement Manager from the Bank yet. Also, the loan whihc I have availed is from a branch in a city where I do not reside any more. Just to mention, I have not got any legal notices or any legal documents from the bank at my current address yet nor I have signed or acknowledged any document from the bank in last 7 years.

In this case, I spoke to teh Debt Settlement Manager today and he wants to come and meet me in person even if I am with my lawyer to dicuss further "things". So can you advise on how to go for this meeting with him? As a matter of surprise or fact, the fellow from the bank is still generous and polite enough to go ahead with the meeting. And this meeting is held at one of my uncle's office who himself is a lawayer practicing in the Civil and High-Court of Bangalore.

Kindly suggest.

As always, indebted to you for all your suggestions and feedback.


Raj Kumar Makkad (Adv P & H High Court Chandigarh)     30 May 2011

it is better to enquire from your account of loan whether it has been got renewed by you after the expiry of 3 years or not means you have signed or not? if not then bank cannot recover after expiry of 3 years. I think the language of bank is lieninet only due to this lapse on the part of bank. so take benefit of this legal and mandatory provision in bank loan matter.

Kumar Doab (FIN)     30 May 2011

Learned members have given their valuable opinion.

Kindly follow the advice.

As suggested by Mr. Makkad, you have a remedy.Hold on to the written acceptance and let your lawyer take over the discussion and conclude the matter.If your lawyer deems it fit he may minute the discussion and conclude the matter in minutes.

hage nibo (lawyer)     31 May 2011

Well said Makkad Sir, that's what I call a well-versed lawyer. Raviji, be bold, if your lawyer is good enough, he can outwit any bank lawyer under the umbrella of Limitation Act.

Good Luck, I am looking forward to your smilling face.

Ravi K (Service Manager)     31 May 2011

My heartiest thanks and gratitude for all the experts here. Mr. Rajoo, Mr. Makkad, Mr. Singh, Kumar Sir & "Hage Nibo. You all make a wonderful unit as a part our legal system. Will keep you updated on the developments on the issue.

Thanks again for all your help on this matter.

Kind Regards,


Dilip Solanki   30 September 2016

I Had taken 5 lacs loan from kotak mahindra bank in jan 2016
since two months i am been ill due to internal bleeding in my body due to which i am strict bed rest and couldnt pay my last two emi  i have taken the loan on my name there are no garuntoe or other parties

a couple of days ago  a lady went to my dads office and was fighting with my dads boss for my dues pending i dont know why?????

now they are coming to my house  and telling lies that i have kept my properties on garentee which i have not i dont know what to do however they are calling again and again that they will sell off the property which i never kept it just was a personal loan i didnt gave them any property papers

dont know what to do as docters have told me to take bed rest for more 6 months atleast i was staying in mumbai have come to hyderabad for treatement in appollo hospital

please need your advise




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