being cautious carefull and aware of banking laws is always necessary before a consumer enters into any settlement proceedings with banks

Originally Posted by brian nathaniel soans

Differance between : 1time settlement - waived off settlement
Understanding a settlement and waived off settlement given by Private banks to its Borrowers - loan defaulters:
There is an important need to understand the legal differance between the two.
A settlement is done by a bank when it understands that a loan consumer is unable to pay the loan availed by him / her .
For ex: a person avails 1 lakh as a loan and has been paying the installment regulary and due to circumstance - the loan defaulter is deemed as a circumstantial defaulter.
Thus the lending bank provides an option to the loan defaulter to arrive on a onetime setllement.
How does a onetime settlement work:
if a person who borrowed 1lakh pays the bank 50 thousad the bank looses net to net of Rs.50,000 on their BALANCE SHEET -Book of AUDITS Banking Records.
The same will be claimed by the BANK at the end of the Financial Year as loss to the RBI to claim Credit Leniency and allowance benefit of RBI to be given to the particular bank to cover up a certain part of the loss of 50 thousand.
Now if the RBI accepts this claim of the bank and gives 20,000 as a credit allowance the bank will cover up certain loss of 50,000 and the loss for the bank will be minimised to 30,000.
However for the client or herin the borrower -loan defaulter he remains a defaulter permanently for life as the RBI lost 20,000 for his shortcoming to pay the bank.
This causes the CREDIT Information Report of the Loan defaulter permanently marred and he will not be entittled to avail any loan in future from any bank.
Waived of SETTLEMENT:
The borrower who is unable to repay the bank a loan , himself authorises a banking legal counsel to address his greviance with the bank,writes to the bank that he is unable to repay the bank.
Also the borrower can only legally register his case of default- subject to arbitratory resolution : through an RBI authorised legal counsel will 1st register the matter with the banking council and then legally explain to the bank and its legal departement that whatever amount paid by the borrower as installment got adjusted to high interest rate imposed by the bank which was untold,not properly explained to the borrower and this is the principle reason that he is presently in such a situation that he isnt able to pay anymore unless the bank arrives on a mutually agreeable and logical solution. This is a case of irregularity in interest rates. The banks also take such matters quite seriosuly as it will be an offence on the bankers part under wrongfull raising of bills under debit of charges.
On achieving an agreed resolution the borrower shall agree to pay the amount agreed upon and the bank inturn will give a no objection letter -waived off cum settlement letter.

The waived off- NOC letter will releave a loan -borrower from entire liability from the bank and all banking bodies.
On achieving the waived off noc letter the CIR Report of the borrower is cleared. Thus the borrower can avail loans from any bank.
This process is called arbitration - adjudicatory resolution and takes 5 working days for completion.

CONSUMERS : THIS IS AN INFORMATIVE MATTER .
PLEASE DONOT FALL PREY TO 1 TIME SETTLEMENTS- IT IS MISLEADING BY LAW AND DOESNT HELP A BORROWER.

FOR LEGAL ASPECTS : BANKING
CALL: DR.B.N.Soans at : 09245201687 / 09245809644