Seven years after having paid a loan, a borrower is the subject of numerous appeals, summons and even an arrest warrant. The only mistake he made was not recovering the LWOP and the lender’s account statement after it was paid.
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Mumbai-based trader Ramnik Patel (name has changed) was happy and relieved when in 2007 he repaid Rs 58,000 to ABN AMRO Bank as full and final settlement of his outstanding loan. Seven years later, he receives calls from recovery agents, advice from attorneys and arrest warrants from locations thousands of miles from Mumbai. He is not only disturbed, but feels like he is being mentally tortured just because of a small mistake the bank made when updating his file.
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In 2005, Patel took out a personal loan of Rs2.15 lakh from ABN AMRO bank. However, during the monsoon rage of 7/26, he suffered heavy losses and was unable to repay his loan on time. Then, on March 21, 2007, he received a letter from the Bank proposing a settlement. According to the letter of offer, he was asked to pay Rs 58,000 in two installments of Rs 29,000 each. The Bank also promised her that she would return all of her unused post-dated checks (CDPs) and non-objection certificates (NOCs) within seven business days of the loan closing on her system.
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After accepting the Bank’s offer, Patel promptly paid Rs 29,000 each time on March 28, 2007 and April 20, 2007 to ABN AMRO Bank in accordance with the settlement offer.
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In the meantime, ABN AMRO Bank has been sold to Royal Bank of Scotland (RBS). RBS then sold all the debts of ABN AMRO to the Kotak Mahindra group. Phoenix Asset Reconstruction Co Pvt Ltd, a unit of the Kotak Mahindra group is involved in the collection of these receivables acquired from RBS.
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Suddenly, in 2012, he received a phone call from a person called Choudhary from the Patiala Parliament Police Station, informing him that a complaint had been filed against him and that a warrant had also been issued by the court. . The warrant was sent from Delhi Police to Dadar Police Station in Mumbai for execution. When Patel arrived at Dadar Police Station, he was told that a case had been filed against him in 2011, which had been transferred to Delhi court. This was linked to the loan he had taken out from ABN AMRO Bank, he was told.
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Interestingly, Patel never received a notice, memo, or arrest warrant from anyone until Choudhary’s phone call. Patel, then asked his lawyer to send a response to everyone involved, including a lawyer called S Gupta from Delhi and Delhi and Mumbai police stations.
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Again, in November 2013, Patel received a notice from a Mumbai-based lawyer on behalf of Phoenix ARC Pvt Ltd. The lawyer, in the notice invited Patel to settle his loan at a conciliation camp (for settlement) organized by Kotak Mahindra Bank on December 2, 2013. The lawyer claimed that as of April 30, 2012, Patel had a delinquency of Rs 42,811.95 which should be repaid with 2% interest per month. Patel, then had to respond to this notice again and submit all documents.
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The following year, on April 3, 2014, Patel received notice from the Mumbai District Legal Services Authority to attend a hearing in Lok Nyayalaya on April 12. Phoenix ARC had approached Lok Nyayalaya to deal with the matter.
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Patel went to the hearing and presented his case. After reviewing the documents and hearing Patel’s point of view, the Phoenix rep agreed to verify his account and respond to him within seven days. They even got involved in writing.
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It has been about nine months since Patel went to Lok Adalat and yet there is no response from the Bank or any respite from the recovery officers.
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So, what was wrong with Patel? For its part, it did not recover unused CNP and PDC from ABN AMRO Bank, while the Bank did not make the necessary changes in its books of accounts. It also raises a big question, how can a large lender like ABM AMRO forget to update their loan book and record the settlement and pass the same as the dues to the buyer. Moreover, given that ABN AMRO no longer exists, how and where would the borrower go, who is presented as defaulting, and harassed for the collection of contributions he had already paid?
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If you are having similar issues, you may want to get help from the free Moneylife Foundation program. Credit helpline Which offers free advice to help you get out of this trap. In Mr Patel’s case, he approached the Credit Helpline and the Trustees of the Moneylife Foundation also raised this matter with the customer service department of the Reserve Bank of India.
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