Bank sending revenue recovery notice for delay in education loan

914 votes

Education loan is similar to any other conventional loan but for the difference that there is no collateral security and further that there is an initial sleeping period when repayment need not be made. Some education loan account are eligible for central and state subsidies also if repayments are properly made. After the sleeping period, repayments are to be made on a regular basis. Since there is no collateral security bank can initiate Revenue recovery proceedings against the defaulter when the account is classified Non-performing. It will be advisable to avail the benefit of settlement through adalath as the bank can waive penal interest and other charges if settled through adalath. Contact directly for any further assistance.

Advocate Murugan E.M. LawRato

961 votes

Loans are meant to be repaid. It is a fact that your sister had obtained the loan and she is bound to repay them ( be it any kind of loan). Govt. brought the education loan scheme to help students to obtain loan without collateral security and low interest rate. That doesn't mean one can obtain loan walk scoot free.
Now to your question yes bank can attach property, if its in your sister's or in guarantors name. If the guarantor to the loan is your father then bank can attach the property . It is advisable to settle the loan at Adalath. To be eligible for ELRS you have to fulfill some criteria. If not eligible approach the bank since its march the end of a financial year they will have some attractive schemes too. Don't prolong the case as interest are multiplying.
On the other hand you sister is protected from facing any cohesive action from bank like arrest.

Advocate Francis Peter Tharakan LawRato

241 votes

1. Education Loan Recovery Process:
   • The recovery of education loans is a standard procedure carried out by banks to collect outstanding loan amounts from borrowers.
2. Revenue Recovery Notice:
   • A revenue recovery notice is a formal communication from the bank informing the borrower about the overdue loan amount and requesting payment.
3. Implications of Delay:
   • Delay in repaying an education loan can result in additional interest charges, penalties, and legal actions by the bank to recover the outstanding amount.
4. Legal Process:
   • Banks follow a legal process for loan recovery, which may include sending notices, initiating legal proceedings, and potentially auctioning collateral (if applicable).
5. Education Loan Court Notice:
   • In cases of persistent non-payment, the bank may initiate legal action by filing a case in court to recover the outstanding loan amount.
6. RBI Rules for Education Loan Recovery:
   • The Reserve Bank of India (RBI) has guidelines and rules in place for education loan recovery. Banks are expected to adhere to these rules when recovering loans.
7. Rights of the Borrower:
   • Borrowers have rights, including the right to be informed about the outstanding amount, the right to dispute discrepancies, and the right to negotiate repayment terms.
8. Negotiating Repayment:
   • It is advisable for borrowers facing difficulty in repaying their education loans to communicate with the bank. Negotiating repayment terms or seeking loan restructuring may be possible.
9. Legal Assistance:
   • If you receive a revenue recovery notice or a court notice related to education loan recovery, it is advisable to consult with a legal expert or attorney who can guide you through the legal process and explore potential solutions.

In summary, the recovery of education loans involves a legal process, and banks have the right to take actions to recover outstanding amounts. Borrowers should be aware of their rights, communicate with the bank, and seek legal advice if necessary to address the situation and explore options for loan repayment.

Advocate Chikirsha Mohanty LawRato