Legal Question in Banking Law in India

I am shifting my existing Home Loan from (Current loan provider) IDBI bank to SBI Bank.

For that SBI is ask for NOC from society : BANK AS NOMINEE

It state as below :

Society is agreeable to accept State bank of India as a nominee for My flat and once the nomination favoring the bank has been registered and advice sent to the bank of having done so, society note not to change the same without the written consent of the SBI Bank.

IS this right.. As per my society & me the Nominee has to be my wife / or my son not SBI BNAK ? Please advice


Asked on 1/18/13, 11:14 pm

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

19.01.2013

Dear Sir / Madam,

Nationalized Banks are governed by the provisions of the Sarfaesi Act, 2000 to minimize their NPAs and protect their interests whilst financing in any unforeseen eventuality.

You will have to balance the savings in interest cost which SBI is luring you with, versus the risk you are taking in the changeover to adhere to more stringent SBI conditions for passing on the interest saving benefit to you.

You may propose to SBI that you are willing to add SBI's name as the second / third nominee in the standard Appendix-14 (Under bye-law No. 32). Should SBI disagree, changeover of loaner bank is not recommended.

Regards,

FCA Prashant Chavan

Mumbai

(You can also mail me for any other on-line advice at [email protected])

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Answered on 1/18/13, 11:37 pm
J. Radhakrishnan independent Practice

Nothing wrong in SBI to be the nominee during the subsistence of its loan

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Answered on 1/20/13, 9:49 am


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