2+ Lawyers are online
Can Someone Use Me as a Reference for a Loan in India?
04-Jul-2024 (In Banking / Finance Law)
Hi, my colleague applied for a personal loan through HDFC Bank and used me as a reference for a loan in India.
Now, he has missed payments and switched companies. The bank keeps calling me, saying he is not answering their calls. Today, a bank representative threatened that a legal case may be filed, and I might be included in it.
However, I never signed any document as a guarantor—I was simply listed as a reference name in his loan application.
I want to know:
1️⃣ Am I liable if the borrower does not repay the loan?
2️⃣ How do I remove my reference number from the loan account?
3️⃣ Can I take legal action against harassment by the bank?
I contacted my colleague, and he said he would check with the bank. However, I don’t want to be involved in this matter anymore. What should I do if the bank continues to threaten me?
If you were only listed as a reference and did not sign any guarantee, you are not legally liable for your colleague's loan; ask the bank in writing to stop contacting you, demand written confirmation that you are not a guarantor and request removal of your name, and keep records of all calls/messages as evidence. If harassment or threats continue, complain to the bank's grievance cell and the Banking Ombudsman / RBI (RBI circular on recovery'agents, Aug. 12, 2022). [https://rbi.org.in/scripts/FS_Notification.aspx'Id=12378&Mode=0&fn=2] For threatening or intimidating conduct you can file a police complaint (criminal intimidation under BNS '351) and/or approach consumer fora or a civil court for injunction/compensation; BNS criminal provisions apply to threats. [https://lawrato.com/bharatiya-nyaya-sanhita] [https://quizgecko.com/upload/bns-bare-act-tRuWbm] The Supreme Court has repeatedly condemned banks-use of muscle/recovery agents (Manager, ICICI Bank Ltd. v. Prakash Kaur, 2007; ICICI Bank v. Shanti Devi Sharma, 2008), and High Courts enforce RBI guidelines against harassment (Telangana HC in Dharavath Narasimha v. Union of India, 4 July 2024). [https://sooperkanoon.com/case/667780/] [https://legitquest.com/case/icici-bank-v-shanti-devi-sharma-others/a789d] [https://indiankanoon.org/doc/56730059/]
If someone has listed you as a reference for a loan in India without your consent, you are not legally liable for repayment only a guarantor has that responsibility. To remove your reference, visit the bank and submit a formal written request asking for its removal. If you're being harassed by recovery agents, record the calls for evidence. If the harassment continues, consult a lawyer and consider filing a police complaint under provisions related to criminal intimidation or mental harassment.
Adv. Chikirsha Mohanty
Delhi | 200+ Answers
Chat
No Legal Liability for Loan References & Steps to Stop Harassment
Hi, don’t worry! Someone using you as a reference for a loan in India does not make you legally liable for repayment. A loan reference is different from being a loan guarantor.
Here’s what you should do:
✅ Record the Calls: If the bank calls again, record the conversation as evidence of harassment.
✅ Ask for Official Identification: Request the caller’s employee ID, branch details, and designation.
✅ Banks Can’t Issue Legal Notices to References: The bank can only send a legal notice to the borrower, not to you.
✅ How to Remove Your Reference from the Loan Account: Visit the bank, submit a formal request, and ask them to remove your reference from the loan application.
🔹 Most likely, a loan recovery agency is using aggressive tactics. If the harassment continues, consult a lawyer or file a police complaint.
12+
Adv. Syam Charan Godi
Adv. Syam Charan Godi
Bhimavaram | 100+ Answers
Chat
No financial institution can legally harass you for being a loan reference. Only loan guarantors are legally responsible for repayment. The bank is applying pressure tactics to track down the defaulter. Here’s what you should do:
- Firmly tell them you are not liable and that they should stop contacting you.
- Request a formal notice from the bank instead of phone calls.
- If harassment continues, file a complaint with the Reserve Bank of India (RBI).
7+
Adv. Syed Hashim Adil
Adv. Syed Hashim Adil
Hyderabad | 25+ Answers
Chat
Dear Client,
You do not need to worry if you never signed any guarantor agreement. A loan reference is just a contact person in a loan application and does not have any legal liability.
If the bank continues harassing you, follow these steps:
- Warn them that you will take legal action for harassment.
- Ask for a formal notice if they claim any legal grounds.
- If harassment persists, file a complaint with the RBI or Consumer Court.
Adv. Sharath Chandra Murthy
Adv. Sharath Chandra Murthy
Hyderabad | 100+ Answers
Chat
Disclaimer: The above query and its response is NOT a legal opinion in any way
whatsoever as this is based on the information shared by the person posting the
query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to
address the specific facts and details.
No Comments! Be the first one to comment.
"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."
