Legal Question in Banking Law in India

Charging of Interest & Appropriation of Loan Repayment

I have taken a loan of Rs 3 mil from a bank in 1994 and have todaye repaid in various amounts Rs 4.7 mil.

Can the bank charge me compund interest on my loan amounts?

Can I inform the bank to apply ''the rule in Clayton's case'' and adjust my repayments first towards my principal amount and then against their outstanding interest?


Asked on 8/31/06, 11:25 pm

2 Answers from Attorneys
Jitendra Kumar Kumar Pandey & Co.

Re: Charging of Interest & Appropriation of Loan Repayment

Read your loan agreement first look for the terms.If the terms of loan agreement authorise the bank to charge compound interest then the bank is right otherwise not.

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Answered on 9/01/06, 12:52 am
BANKIMCHANDRA SHAH ADVOCATE DIGVIJAYA CONSULTANCY SERVICES

Re: Charging of Interest & Appropriation of Loan Repayment

you must forward the copy of the agreement you had with the bank and further confirm that you had to pay regular instalments and that you paid all regularly.

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Answered on 9/01/06, 1:49 am


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