Delay in closing car loan

[shivamk]

Hi TFians

My father had taken a vehicle loan in 2007 and paid it off in few years. He had even obtained an NOC certificate and last payment date is in March 2013.

However when I refreshed his CIBIL report today, the account still shows as active in CIBIL, though outstanding amount is 0. I have a few doubts:

1. How to get this loan closed? Should I dispute on CIBIL or reach out to bank?

2. Is the bank liable to pay a compensation in this regard for delay in marking the account closed? The NOC should be a valid proof to ascertain that customer had asked to close the account and bank confirmed the same?

3. If answer to 2. is yes, can someone please help with the circular that mentions this clause? I found https://m.rbi.org.in//Scripts/NotificationUser.aspx?Id=12554&Mode=0 on another thread. Is this the right one?

Thanks in advance.

Related incident:
The last EMI for this loan was a lump sum payment which the bank was asked to debit from account. However they didn't and the loan had piled up from less than 10k to approximately 1L and then the bank sent intimation. We had to pay it off by breaking some FDs and couldn't contest at that time since we didn't have a proof to prove we had asked for lumpsum amount payment to close loan.

 

[shivamk]

Tagging a few experts for guidance:

@VISHESH_BANSAL @its_karan @SSV @m4b @Vasuki @Tejo @doraemon @Abhishek012 @RAMESH BABU N @Shubham Yadav

 

[SSV]

Hi TFians

My father had taken a vehicle loan in 2007 and paid it off in few years. He had even obtained an NOC certificate and last payment date is in March 2013.

However when I refreshed his CIBIL report today, the account still shows as active in CIBIL, though outstanding amount is 0. I have a few doubts:

1. How to get this loan closed? Should I dispute on CIBIL or reach out to bank?

2. Is the bank liable to pay a compensation in this regard for delay in marking the account closed? The NOC should be a valid proof to ascertain that customer had asked to close the account and bank confirmed the same?

3. If answer to 2. is yes, can someone please help with the circular that mentions this clause? I found https://m.rbi.org.in//Scripts/NotificationUser.aspx?Id=12554&Mode=0 on another thread. Is this the right one?

Thanks in advance.

Related incident:
The last EMI for this loan was a lump sum payment which the bank was asked to debit from account. However they didn't and the loan had piled up from less than 10k to approximately 1L and then the bank sent intimation. We had to pay it off by breaking some FDs and couldn't contest at that time since we didn't have a proof to prove we had asked for lumpsum amount payment to close loan.

1. Dispute via Bank by presenting cibil report
2. You should be able claim compensation if you can prove some sort of loss , physical or psychological
3.no time for me to look into it

 

[shivamk]

1. Dispute via Bank by presenting cibil report
2. You should be able claim compensation if you can prove some sort of loss , physical or psychological
3.no time for me to look into it

For 2 and 3 I was mainly talking about Rs. 100 per day compensation for not rectifying or resolving complain in 30 days. Will research a bit more and wait for guidance from others.

 

[RAMESH BABU N]

I am more interested in the vehicle's registration status.

At the time of giving the vehicle loan, a Hypothecation Noting must have been made in the vehicle RC.

Has it been removed ? Basing on a suitable release letter (to the RTA) from the Bank indicating that the loan was closed n that Hypothetion needs to be cancelled.

If it is cancelled, it is a solid proof for seeking compensation. If it is still in Hypothetion mode, that proves that the loan is not yet paid - legally speaking if it comes to that. Or, the owner is not inclined to get it deleted for any other reason.

Unless all the related dox are scrutinized, further course of action cannot be decided upon. Because it is nearly 10 years old case. Every minute detail counts.

Do not go by ring-side viewer's opinion or guidance.

 

[RAMESH BABU N]

2007 vehicle loan.

So, the vehicle must jave been 15+ years old.

Has the RC been Re-Validated for 5 years ?

When was the Hypothetion deleted ? In the old RC or in the renewed RC ? Or, is it still in RTA's books ?

 

[shivamk]

At the time of giving the vehicle loan, a Hypothecation Noting must have been made in the vehicle RC.

Has it been removed ? Basing on a suitable release letter (to the RTA) from the Bank indicating that the loan was closed n that Hypothetion needs to be cancelled.

Yes sir the Hypothetion has been removed. I just checked on Parivahan portal, screenshot attached.

Unless all the related dox are scrutinized, further course of action cannot be decided upon. Because it is nearly 10 years old case. Every minute detail counts.

Yes sir, totally aligned. My father was not aware at all and believed the bank, but they didn't do it.

Attaching screenshot of CIBIL as well. The date closed field is empty.

Also sir, could you please guide me what should be the next course of action?

 

[shivamk]

2007 vehicle loan.

So, the vehicle must jave been 15+ years old.

Has the RC been Re-Validated for 5 years ?

When was the Hypothetion deleted ? In the old RC or in the renewed RC ? Or, is it still in RTA's books ?

Yes sir RC has been revalidated. And Hypothetion was removed in old RC itself

 

[RAMESH BABU N]

Yes sir the Hypothetion has been removed

Also sir, could you please guide me what should be the next course of action?

When it was removed ? Which date/month/year ?

Without Bank's letter it was not possible. When their discharge letter was dated ?

Thiese two dox prove that your dad knew about the delay n accepted it till now. And, contesting it now looks not proper - as there is what is known as a "limitation clause" according to which you can't go against a decision n challenge it after certain number of years (different acts have different limitations - beyond which they get time-barred). Thereafter, you can't legally speaking contest/challenge in a court.

So, gather all (I mean ALL) info/details n seek redressal first from the Bank. Build up correspondence n prove that the bank is at fault. Then, approach a lawyer. He might arrange for a compromise or go to court.

 

[shivamk]

When it was removed ? Which date/month/year ?

Without Bank's letter it was not possible. When their discharge letter was dated

I will have to get these details from him

Thiese two dox prove that your dad knew about the delay n accepted it till now.

No sir, he always thought that the bank must have closed it. He doesn't even use credit cards and didn't check his credit report in years. We are planning for a home loan, so I checked his CIBIL and found this.

So, gather all (I mean ALL) info/details n seek redressal first from the Bank. Build up correspondence n prove that the bank is at fault. Then, approach a lawyer. He might arrange for a compromise or go to court.

Ok sir, would gather all details and build up a case. Will RBIO of any help?

 

[SSV]

No sir, he always thought that the bank must have closed it. He doesn't even use credit cards. We are planning for a home loan, so I checked his CIBIL and found this

This shows how pathetic the Indian banking system is and
How foolish of your father to depend on those so called banking professionals??
Did he talk to any banker at that time about this closure of this loan?
Which bank is this anyway?

 

[shivamk]

Did he talk to any banker at that time about this closure of this loan?

Yes he did, and they said that after NOC is given and Hypothetion is removed the loan is deemed closed.

Which bank is this anyway?

Kangra Central Co-Op bank

 

[SSV]

Yes he did, and they said that after NOC is given and Hypothetion is removed the loan is deemed closed.

Kangra Central Co-Op bank

For you to be able to claim any compensation,did it cause any hardship / loss for you?
If so, why didn’t you raise it till now?
Or you just want to try and see how you go?

 

[SSV]

Yes he did, and they said that after NOC is given and Hypothetion is removed the loan is deemed closed

See you can’t trust these banks and believe in their words.. yes technically the loan was closed as far as bank was concerned..
But you need to make sure the after the event procedures are completed or not..
You can’t just wake up after a decade or so and say banker was at fault.. yes in this case baker was actually at fault but the immediate question comes what did you do for all those 15 years or so??

 

[RAMESH BABU N]

Since it is a CO-OPERATIVE BANK, their documentation would not be in the industry-standard IBA format.

Unless n until it is verified n scrutinized in detail - every word of it - none of us can guide you. Except a seasoned lawyer.

Go to such an experienced guy. Without further delay. If you are serious.

 

[SSV]

Yes he did, and they said that after NOC is given and Hypothetion is removed the loan is deemed closed.

Kangra Central Co-Op bank

Another thing , when you start complaining about banks fault, the bank also would like to defend itself from their angle and asks for all sorts of evidence s from you and try to find any negligence from your side also..

Are you really ready for long drawn battle which involves lot of mental strain and time and energy??

 

[shivamk]

Or you just want to try and see how you go?

My primary motive is to get the loan closed since it might impact his future credit score and secondarily ask for compensation if any for their negligence.

 

[shivamk]

See you can’t trust these banks and believe in their words.. yes technically the loan was closed as far as bank was concerned..
But you need to make sure the after the event procedures are completed or not..
You can’t just wake up after a decade or so and say banker was at fault.. yes in this case baker was actually at fault but the immediate question comes what did you do for all those 15 years or so??

I agree, but the reason was he didn't know much about credit scores and all. Lack of awareness in this matter, else he would have surely got it closed.

Even now he isn't much aware what to do next, it's me who somehow caught this.

 

[shivamk]

Since it is a CO-OPERATIVE BANK, their documentation would not be in the industry-standard IBA format.

Unless n until it is verified n scrutinized in detail - every word of it - none of us can guide you. Except a seasoned lawyer.

Go to such an experienced guy. Without further delay. If you are serious.

Ok sir, will gather the documents and try reaching out to a good lawyer.

 

[shivamk]

Another thing , when you start complaining about banks fault, the bank also would like to defend itself from their angle and asks for all sorts of evidence s from you and try to find any negligence from your side also..

Are you really ready for long drawn battle which involves lot of mental strain and time and energy??

Yes totally understand, it wouldn't be an easy case. But I will surely give it a try with all the documents and resources I can gather.