Legal Question in Banking Law in India

I being ex manager of a nationalised bank sanctioned one of my relatives a loan against 2 nscs for rs10,000/each maturing on 2013 and 2014 and i also kept my own fixed deposit of sufficient value loan amunt was rs50,000/ sanctioned in 2006.party partially repaid bank encashed my fdr after encashing one nsc and another nsc after credting my fdr to loan in suspense account.bank refusing to pay nsc proceeds to me citing it is the property of borrower and even no loan is outstanding bank either not creding my fdr nor giving any letter.my question is cann a bank can encash my fdr when sufficient security is there and refuse to pay procceds of nsc to me and threby rewarding defaulting borrower


Asked on 6/28/16, 2:13 pm

2 Answers from Attorneys

1) Yes. Bank can exercise right of set off against FDRs under lien to bank.

2) After closure of loan, the balance to be paid to the depositor not the borrower.

The lien/ assignment is to the extent of outstanding debit only.

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Answered on 6/28/16, 8:43 pm
Fca Prashant Chavan Expert Edge LLP

29.06.2016

Dear Sir / Madam,

You should communicate, discuss, resolve and settle the issue with the Bank.

Regards,

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Answered on 6/29/16, 3:18 am


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