Loan settlement wrt to cgtmse loans
The grievance is to seek your advice for the Loan facility availed from Bank of Baroda is following the prescribed procedure, including the R.B.I. guidelines and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.
The cardinal principles of the scheme are as follows: Only MSEs engaged in manufacturing activities and those in the service sector, excluding retail trade, were eligible thereunder. The entire credit facility had to be given without collateral and/or third party guarantee. Loans were to be secured against the primary security which was defined under the scheme to include assets created out of the credit facility extended to the borrower and/or which are directly associated with the business/project of the borrower for which the credit facility had been extended.
We have availed a Term loan account No [deleted] of Rs.10,00,000/- and Cash Credit account No [deleted] of Rs.1,50,000/- from Bank of Baroda Ulloor Branch, having insured it under the CGTMSE scheme.
Since the business dint take off as per business plans, with the banks knowledge the primary asset were liquidated for Rs.9,50,000. The entire proceed were used to settle the cash credit and Rs.5,40,000 was used to settle the Term loan.
The Total O/s on 22nd August 2014 stood at Rs.4,41,005. Subsequently we had received a mail on 20th September 2014 from Bank of Baroda on closing the cash credit and o/s balance of Rs.4,48,432.00 .
Further we had anticipated recovery to complete using the CGTMSE procedure.
After making settlement of other we had remitted Rs.1,00,000 on 17th November 2014 and another instalment of Rs.100000 on 12th December 2014 and with this the o/s balance was Rs. 2,69,021.00
That having been said, the fact however remains that the bank has not classified this account as a NPA and without claiming the amount due from the CGTMSE or disclosing full and proper facts as to the procedure adopted by it in terms of the scheme.
The bank is now attempting to recover an amount of Rs.4,52,059 due with interest accruals . A notice through the Deputy Tahsildar has been send to us to recover the amount due through sale / attachment of the proprietor property.
Asked 2 years ago in Business Law
In your opinion how should the response be drafted.
Asked 2 years ago
a. should I seek a legal help locally or can I seek a help from your self.
b. should I write to Banking Ombudsman contesting that the loan was taken under CGTSME and bank is not recovering the amount from the trust and should challenge once recovery wasnt received from the trust.
Asked 2 years ago