DEBT COUNSELLING: Sanjay Agarwal

I have taken a car loan with some installments still unpaid. Recovery agents of the bank have been calling me or visiting my place. The resale value of my car today is less than the total dues that I have with the bank. If I surrender the car to the bank, would they consider the loan as closed or do I need to pay the differential amount too?
In India, banks treat a loan as closed only after all dues are paid. If the resale price of the collateral, in this case the car, is less than the total loan outstanding, then the borrower needs to pay the balance amount. If not paid, banks have the right to initiate appropriate legal action to recover it.

 

My advice to you is to arrive at one-time settlement with your bank and sell the car with their consent. In this case, the bank may offer to waive some charges. You should pay the difference between the settlement amount and the resale price of the car to the bank and obtain a no-dues certificate.

I have been paying my credit card bills on the sixth of every month while the last date for payment is the tenth. Five months back, I got a call from the bank on the 15th, saying they haven't received payment. When I confirmed paying before the due date, they stopped calling me. But, I was charged a penalty and interest in the next month’s bill. On enquiring, I was told that the penalty may be waived, but the interest amount has to be paid. On further probe, I was told cheque clearance took time. And this, when the cheque was of the same bank. They are unable to give me a satisfactory reason. As a result, I have stopped paying. But, each month's bill has an extra interest component. Please help.
With new technology platforms and core banking solutions that almost all banks have today, there should be no clearing delays for the cheques of the same bank. I’d recommend that you ask your bank to give you the same clarification in writing. This is not a serious issue since the bank has accepted the clearing delay and should get resolved at this stage itself. If not, you need to contact the nodal officer of the bank, with or without the above mentioned letter. If he is also not able to address the issue, then you need to approach the banking ombudsman.

The writer is senior vice-president and group head (retail strategy and branding) at Arcil. The counselor’s views expressed here are his own. Send your queries at yourmoney@bsmail.in