Legal Question in Banking Law in India

I am running a pvt ltd concern with one of my friend as a another director. for which we are having an cash credit account with punjab national bank for 80 lakhs,I have given 220% collateral security thru two properties , one is My father collateral guarantee value of property worth 84 lakhs and I have given another propery of mine worth 103 lakhs . My loan is based on the stock and receivables and then the collateral security of 100% . Due to the family dispute , my brother has instigated my father to send a lawyer notice to the bank stating that not to further advance and he is withdrawing the guarantee. On the basis of this letter the bank has freezed my account for both credit and debits without asking me for an explanation neither in writing or by person. I want to know what they done is correct taking in to the account without my fathers propery they have my property which is 128% . how can they freeze the account. Moreover i am AA rated customer by the bank itself without any cheque bounce or defaulter forthe last 6 years and my stock onthat day is 155lakhs . I want to take them to the court, before going there i want to verify what i am doing is correct. I need the expert opinion on this

Srikanth
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Asked on 8/15/11, 5:01 am

3 Answers from Attorneys

J. Radhakrishnan independent Practice

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Normally before freezing your account which I presume you r servincing the interest, the Bank should put you on notice. Your father's guarantee may not extend to future borrowings and the Bank has to chrystalise his liability. Appeal to the Bank to restore the facility within a time frame explaining that the security they have even without your father's guarantee is sufficient and or offering to substitue further security. If they don't relent, complain to Banking Ombudsman after serving a notice on the CMD of the Bank. U have every right to complain about the Bank's unilateral action.

Answered on 8/15/11, 6:30 am

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