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shivateja vakkanti (articleship)     17 May 2013

Pmry loan

My father has taken PMRY loan from Andhra Bank in 2004 for business purpose and loan amount is 75000,

Bank took our land documents as security, my father pays Rs.35000 to bank, but after our financial position become weak hence he didn't pay loan.

But now bank noticed him to repay loan.

I want to know whether they has right to auction the land and sue against him? and Is there any way to settle the loan repay without interest.

Pls tell me it's urgent.....

Thanks in advance..


 4 Replies

LLB.ACS Gourav Khatri (COMPANY SECRETARY)     17 May 2013

You may go for OTS (One Time Settlement) with the Bank in which the Bank may waive your interest element of the outstanding amount.


Gourav Khatri

csgouravkhatri@gmail/ 99587 98699

LLB.ACS Gourav Khatri (COMPANY SECRETARY)     17 May 2013

Also it will depend on the Agreed Terms by you while sining loan documents. If it was agreed so, the Bank may go for auction also.

Gourav Khatri 99587 98699

Anjuru Chandra Sekhar (Advocate )     18 May 2013

If you keep balance below one lakh, the bank cannot take action under Securization act (selling off property giving 60 days demand notice).  The other way bank can sell your property is by filing Original Suit in Civil court. It takes lot of time, hence the best way is to keep the account balance (outstanding) below one lakh and keep negotiating with bank for One Time Settlement.

malipeddi jaggarao (retired banker)     19 May 2013


First of all Bank can not take any collateral securityfor giving PMRY Loan.  But over-enthusiastic managers do obtain some security.  

Selling away your land is not easy.  They must have kept the original document with them, but they can not sell it either under Securitization Act or by initiating civil suit. 


Only loss for you is,, the document may not be made availabel to you until the loan cleared.   Hence do not be afraid of selling awaythe property.  Bank can not do it in any case.

The other alternative is go to the Bank personally meet  the Manager that you are willing pay under Onetime Settlement.  They may not waive the entire interest, but they may waive interest from the day theloanbecame bad.  During the discussion, you clearly tell the Manager that they do not have any right to sell the property as keeping the document itself is against the rules of PMRY and hence OTS is the best option for both bank and you.  I hope the matter will be settled if you represent the points properly - which include a) default isnot wilful and your father's financial condition is bad   2)  Ready to pay OTS if the some porition of interest is waived 3) Bank do not have right on the property and the sdocument is illegally obtained against the norms of PMRY Scheme. 

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