The Reserve Bank of India (RBI) has implemented the Supreme Court’s decision giving great relief to borrowers. Now before categorizing a borrower as a defaulter or fraud, banks will have to give them a chance to present their side.
Last year, the Supreme Court had said that keeping in mind the principles of natural justice, borrowers should be given a chance to understand the findings of the audit report. Let us also tell you which decision of the Supreme Court has been implemented by the RBI. Due to which common people or in other words borrowers will get relief.
Borrowers should be given a chance
According to banking experts, private sector banks take immediate action against borrowers after the 90-day cooling period. It has been seen many times that the haste of banks has led to excesses. For this reason, the country’s top court had ordered the RBI to change the rules last year.
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According to Ashwini Rana of Voice of Banking organization, when a person goes to take a loan, the bank looks at all his documents, status and other aspects. In such a situation, when the same person is not able to return the loan for some time, then also he should be given a chance to find out the reason. This is the right way. He said that many times such cases have come to light when legal proceedings were started by the bank and later even after knowing the bad condition of the concerned borrower, the bank officials could not help.
The Supreme Court gave this decision
According to banking expert lawyer Shrikant Shukla, the Supreme Court’s decision was based on natural justice. Earlier, if a bank categorized a borrower as a fraud or defaulter and initiated legal proceedings, in such a situation the borrower could present his side or defense only by going to the court. Whereas the main purpose of the bank is to recover the loan given. In such a situation, banks will not have any problem in knowing the borrower’s side before giving notice.
Shukla said that there are lakhs of such cases across the country in which borrowers had termed the steps taken by the bank as excessive. When the matter reached the Supreme Court, the court made it clear that the borrower should be given a chance. It is worth noting that now in such cases, banks will have to give three weeks’ time to the borrowers to present their side. Also, without hearing the reply, the bank cannot issue a show cause notice.
