Banking Law Questions and Answers in India

Banking disputes in India involve the Banking Regulation Act, 1949, the SARFAESI Act, 2002, the Recovery of Debts and Bankruptcy Act, 1993, the Negotiable Instruments Act, 1881 and the Reserve Bank of India's directions on customer service and fraud liability.

Questions cover loan recovery and SARFAESI notices, what a borrower can do when property is classified as a non-performing asset, cheque dishonour proceedings under Section 138, unauthorised electronic transactions and the customer's limited liability under RBI's framework, credit score and CIBIL disputes, and harassment by recovery agents.

A SARFAESI notice under Section 13(2) follows classification of the account as a non-performing asset and gives the borrower sixty days to pay before the secured creditor can take possession. The borrower has a right to make a representation, which the bank must consider and reply to with reasons, and can approach the Debts Recovery Tribunal under Section 17 once measures are taken. Missing these windows narrows the options sharply.

Cheque dishonour under Section 138 of the Negotiable Instruments Act runs on its own clock: a demand notice within thirty days of the bank's return memo, fifteen days for the drawer to pay, and a complaint within the month that follows. Each step is a condition of maintainability, so the dates on the paperwork matter as much as the merits.

Recovery agents operate under RBI's outsourcing directions, which prohibit calls outside prescribed hours, intimidation, and contacting people unconnected with the loan. Conduct beyond that is actionable, and complaints go to the bank's grievance channel and then to the RBI Ombudsman, which handles deficiency in banking service free of cost.

RBI's rules on unauthorised electronic transactions limit a customer's liability substantially where the fraud is reported promptly, so reporting to the bank in writing without delay is the single most important step.