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Bank asking me to sign revival letter for my loan
29-Mar-2023 (In Banking / Finance Law)
bank peoples asking me to make sign on revival letter so wt happens if i don't make signature on that
AS PER THE LIMITATION ACT, 1963, the life/validity of a loan document is three years, after which it will not be enforceable in the Court of Law. That is, the recovery of loan dues through legal course is lost to the bank. So in order to keep the loan documents alive and enable banks to recover the loan dues through the Court of Law, banks do obtain what is called as as “Acknowledgement of Debt” or AOD, from the borrower as well as from the guarantor/s to keep the loan documents alive and enforceable in a Court of Law. A revival letter is taken from the customer or guarantor to the effect that the Demand Promissory note taken by bank at the time of issuing loan shall be continuing security.
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Adv. Ayantika Mondal
Bangalore | 400+ Answers
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If you are in requirement of more money, sign the revival letter, otherwise your loan account will close automatically. It is just a formality that every bank follows in case the customer needs more credit accomodation.
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