• Loan re-payment under ots

Me and my partner been granted business loan on name of our firm in 2011. The loan was guaranteed by one of my friend against mortgage of his home. From last 15 month our loan account is under NPA and now bank has offered one time settlement. My partner is not interested and has not showed any interest to re-pay the loan. I'm ready to re-pay under OTS however I'm concerned about effect of OTS on my Cibil score (As per my knowledge in CIBIL they remark it as SETTLED, which is not good sign). Please suggest how I can pay loan under OTS and at same time can protect my CIBIL from getting any negative remark. In my latest personal CIBIL report there is no mention of business loan on name of firm. Report of other loan like home are mentioned and my CIBIL is still very healthy. Can you also explain why report of business loan(Where I'm partner) is not in my CIBIL? How my partners liability can be ensured in this case?
Asked 2 years ago in Business Law from Bilaspur, Chhattisgarh
1) accept bank offer of OTS . 

2) if you fail to accept the offer bank will take recovery proceedings against firm . 

3) bank will auction your friend house in recovery proceedings .

4) since loan has been taken in name of the firm report  of the loan  is not reflected in your CIBIL score
Ajay Sethi
Advocate, Mumbai
27396 Answers
1490 Consultations
5.0 on 5.0
1. Banks and Financial Institutions send reports of defaulting borrowers to CBIL report for entering in to their record and also for  updating it,

2. Your name has not yet been sent by the Bank to CIBIL as defaulter since OTS proposal is on,

3. Accept the OTS proposal and pay off the dues to get your friend's mortgaged property released,

4. Your CIBL record will also stay clean.
Krishna Kishore Ganguly
Advocate, Kolkata
13602 Answers
292 Consultations
5.0 on 5.0
since you are co-borrower then you have to settle or re-pay jointly otherwise bank can auction the secured property.

CIBIL is an Autonomous Body whose full form is (Credit Information Bureau (India) Limited.). The Credit Score is gaining importance as any person having any kind of loan (Personal Loan, Home Loan, Car Loan, Two Wheeler Loan, Business Loan etc) or credit card or Overdraft Limit or even Inquiries with Financial Institutions for taking loan or even acting as guarantor or co-applicant.

CIBIL score signifies that how well have you repaid your previous loans and credit card obligations in the past basis which you get a score. CIBIL match signifies your repayment pattern - i.e how many loans have you taken from what time period of opening to close.
Minansu Bhadra
Advocate, Kolkata
266 Answers
24 Consultations
4.8 on 5.0
Dear Querist
it may be possible that the bank sent an information regarding your firm and not you or your friend, it will be better to accept the OTS & try to pay the settled amount.
the credit score and CIR not only helps loan providers identify consumers who are likely to be able to pay back their loans, but also helps them to do this more quickly and economically. This translates into faster loan approvals,Until recently, there was little visibility and transparency with regards to the loan approval process and the elements that loan providers used to evaluate your loan application. Since, CIBIL has made your credits score and CIR available to you, you will be able to see how valuable a customer you are to loan providers. it is better for you that there is no cibil update regarding your NPA
Nadeem Qureshi
Advocate, New Delhi
3814 Answers
151 Consultations
4.9 on 5.0
Better accept bank decision and opt OTS  otherwise they will proceed with securitisation process and attached the house and recovery proceedings.so better settle it.since it is taken in e firms name you won't get it reflected in the CIBIL Score.
Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultations
3.5 on 5.0
1. Accept the one time settlement without any delay. If you do not accept it your name will be sent by bank to CIBIL whereafter you will be listed as a defaulter which will shut out the prospects of getting any bank loan in future. 

2. If you accept the settlement offered by the bank and pay off the dues the mortgage will be released. Failure to repay the loan will inevitably result in recovery proceedings being initiated against your friend. The first step in recovery proceedings will be attachment of the property which will be followed by a public auction thereof and that too at a throwaway price. 

3. Accepting the offer of bank is your best bet.
Ashish Davessar
Advocate, Jaipur
19628 Answers
507 Consultations
5.0 on 5.0
you should accept the bank's offer as soon as u can otherwise bank can attach ur friend's property and can sell it off to recover its dues.....the question of ur name nt showing in CIBIL score is because the loan has been taken in the firm's name and still the bank OTS offer is pending.
Swithin Subhashish Lawrence
Advocate, Allahabad
47 Answers
3 Consultations
4.5 on 5.0

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