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RBI Guidelines: Many people take loans from the bank for their financial needs, but many of them do not pay the EMI on time and default on the loan. Not paying any kind of loan is costly for the loan holder in many ways. Banks put such loan holders on the list of defaulters (bank action on loan defaulter).

After this, the loan defaulter has to face legal action. This can happen in many ways, know what legal action the bank (bank news) takes against the defaulter in case of loan default and what are the rules of RBI (RBI rules for loan defaulters) regarding this.

The bank has the right to go to court -

When the loan is not repaid by the customer (loan repayment rules), then the bank can file a case against the loan defaulter in the civil court. The bank (Bank News) will lobby for the recovery of its loan amount and the court can order to confiscation of the property (property auction rules) or even the salary of the defaulter.

Apart from this, punitive action can also be taken against the loan defaulter under Section 420 of the Indian Penal Code. This can include fines jail or both.

CIBIL score will go down -

One of the main reasons for poor CIBIL score is not paying the loan EMI i.e. loan default (loan default ke karn). After this, the CIBIL score does not improve for many years. It can remain bad as long as you remain a loan defaulter. In such a situation, the chances of getting a loan from anywhere else (bank loan news) also end.

Has to face recovery agents too -

Apart from bank notices and legal action, the person who does not repay the loan often has to face recovery agents (rules for recovery agents). Banks send recovery agents to the home of the loan defaulter (legal action on loan defaulter) to recover their loan amount. Before this, an attempt is made to find a solution through talks, but in the end, many banks take the help of recovery agents. If no solution is found from anywhere, legal action is taken (legal action in loan default).

According to RBI, these are the rights of banks-

RBI has also laid down rules for the behavior and action taken by banks towards loan defaulters (loan defaulter's rights). All banks and NBFCs have to follow them. According to RBI rules (RBI Rules for loan defaulters), banks and recovery agents are given a chance to repay the loan by treating the loan defaulter properly.

Banks have to issue a notice before taking any action against the loan defaulter. If the customer ignores the bank notice (notice on loan default), then it is in the right of the banks to take legal action.

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