Notice
1. Demand Notice
(Dunning letter, soft legal notice¹/EMI reminder notice): Legal notice sent through an Advocate to the customer, demanding to pay the overdue amount. As and when the dues accrue, we can send this notice to customers anytime. Debt collections service companies also can mention the time (Immediately, One week, 15 days) to repay the loan to hold further legal consequences.
Stage: At any stage, this notice can be sent to customer from X DPD to infinity.
Communication Mode: By way of e-communication or through RPAD (Registered Post with Acknowledge Due).
Outcome:
- Considering the notice customer may pay the overdue.
- Customer may ignore the notice.
- The customer put a reply to the notice by self or through his Advocate with his views about the dues.
Further action against this demand notice:
- No further action against this demand notice in the early stages.
- Considering the customer payment/reply we may recall this notice.
- This Notice can be issued before filing a Civil suit/Summary suit/Recovery suit and at the time of filing/trial, we may show this as pre intimation or proof of demanding the overdue/outstanding amount.
2. Loan Recall Notice
This is the Pre-Intimation of Notice issued to the customer about the termination of the Loan Agreement or recall the loan facility due to non-payment of instalment with claiming the total outstanding amount. This will be sent through designated Advocate by the debt collections services entity.
Stage: On Stage of SMA (Special mention case), we can issue Loan recall notice subject to the terms mentioned in the agreement. Usually, this action will be taken when the customer missed out 3 or more instalments.
Communication Mode: By way of e-communication or through RPAD (Registered Post with Acknowledge Due).
Outcome:
- Considering the notice customer may pay the overdue.
- Customer may ignore the notice.
- Customers may put a reply to the notice by self or through his advocate with his views about the overdue.
Further action:
As per the Loan contract when a customer having future tenure to repay his loan instalments and due to non-payment if the bank/finance company wants to take up further legal steps to claim the total outstanding with immediate effect it’s mandatory to issue such notice to the customer.
- When the customer fails to repay the overdue even after issuance of this notice, the bank can file a case against the customer before a judicial authority to recover the dues.
- File recovery suit/Summary Suit/Civil suit before District Civil Judge
- Present customer’s security Cheque to claim the total outstanding amount
- File Arbitration before the Sole Arbitrator as per Terms and condition of the agreement
3. Demand notice U/s Sec 138 of NI Act. & Sec25(1) Payment and settlement Act
When the ECS/Auto Debit/NACH gets dishonor, bank/Finance companies have a provision to claim that amount from the borrower ‘U/s 25 of Payment and Settlement Act. 2007’. When a physical Cheque gets dishonored, bank/Finance companies have a provision to claim that amount from the borrower U/s 138 of Negotiable instrument Act (N.I Act). When the Cheque/mandate gets bounced, before filing a case against a borrower, the bank should send a notice through his Advocate to the customer demanding the claim amount within 30 days from the date of Dishonour.
Stage: Any of the buckets (X to infinity) as and when ECS/NACH/Auto Debit mandate or Cheque get dishonor, bank/Finance company have the right to send the notice.
Communication Mode: By way of e-communication or through RPAD (Registered Post with Acknowledge Due).
Outcome:
- Considering the notice customer may clear the overdue.
- Customer may ignore the notice.
- Customers may put a reply to the notice by self or through his advocate with his views about the overdue or dishonor of the instrument.
- May agree to contest the case before the judicial authority.
Further action: A complaint can be filed before District Magistrate
4. Notice U/s 21 of Arbitration & Conciliation Act
This is the Intimation cum demand notice issued to the customer before step into Arbitration proceedings and after issuance of Loan Recall notice to resolve the dispute or to recover the claim amount. The Notice will be issued to the customer before filing a petition before Sole Arbitrator with giving further actionable process of the dispute. Notice can be sent by Power of Attorney (POA) holder the bank or through his designated Advocate
Stage: If the purpose is to recover the overdue, The Arbitration process took place on SMA/NPA Level, in an exceptional scenario if any dispute on the loan we can refer to the Arbitrator to resolve the issues at any point of time.
Communication Mode: By way of e-communication or through RPAD (Registered Post with Acknowledge Due).
Outcome:
- Considering the notice customer may pay the overdue.
- Customer may ignore the notice.
- Customers may put a reply to the notice by self or through his advocate with his views about the overdue.
- Ready to contest the case
Further action: Considering customer response bank/Finance company may file a petition before the Arbitrator to seek relief on the dispute.