Regarding validity of loan documents

5404 views 4 replies

likhitha pandeswara

100

40 Points Joined May 2011

Could anyone pls clarify my doubts.. 1) when can a debt be called time barred in banks? does it depends only on promisory note or also on other documents like hypothecation agreement,letter of guarantee etc executed during sanction. 2) what is the validity period of those documents?like hypothecation agreement,letter of undertaking,leeter of guarantee etc.. 3) should the banker obtain all the fresh documents,as and when expired?i heard from banker that it is sufficient to obtain debit balance confirmation wherever necessary and automatically all the remaining documents will be validated.but i dnt think dats right.. So pls extend your help in clarifying these.Thanks in advance....

Replies (4)

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

1&2. document validity depends on type of agreement and its period is clearly mentioned in agreement..... 3. documents are reviewed after its expiry and then accordingly renewed. in case of loan documents of long tenure, documents are reviewed every 2nd yr.

likhitha pandeswara

100

40 Points Joined May 2011

Ok...thank you.....

Gangatharan

Partner

108 Points Joined September 2013

This concept will differ from banks to banks.

As per limitation act, document will be valid for 3 years.

After years it has to be renewed.

In some banks they will say, If account is PA, there is no requirement of obtaining documents after years. When he is depositing money he ll sign the pay slip, so he is agreeing his debts. so obtaining documents after years is not required for them. So they will renew the documents for NPA accounts only.

In some other banks, NPA means everything over. so they ll think, they dont want torenew docs for them and they ll renew the documents for PA accounts only.

like that it ll differ.

Renewal of docs will be done for every 3 years.