Sir, I'm Maharastra state Govt. employee. Nationalised bank is sanctioning a home loan to me, they want a under taking letter from my department that monthly installment to be deducted from my salary and directly pay in loan account of mine with the bank. But my department is denying to give such undertaking letter. without it my loan is not being sanctioned. Please guide me, is it my right to get such under taking from my department.
From India, Jalgaon
From India, Jalgaon
Hello,
It may sound harsh but under law the employer is NOT obliged to issue such a certificate to a NATIONALIZED bank nor such a bank has such a right under law! The bank is apparently enforcing its own rules despite having obtained two or more surities/guarantors from you. Unfair, unprofessional, unbusinesslike but true!!
However under Cooperative Societies Act u/s 49 the cooperative bank or society has a right to recover any outstanding from your wages and other dues as applicable. The employer cannot refuse to deduct relevant EMIs and to remit to such an institute as in case his refusal to do so the coop. bank/coop institute under law can proceed against the employer and recover the entire outstanding amounts as "arrears of land revenue".
But even this will be controlled by the provisions of the Payment of Wages Act and the Cooperative Societies Act. In any case the employer NEVER can be forced to underwrite your loan (like a surety) so that if the borrower defaults it will have to make good by repaying the loan. Deduction of relevant EMIs from earned wages, within the provisions of Payment of Wages Act and remittance to the institute only can be enforced but not by a nationalized Bank!
Trust your querry is answered. I suggest that you assure the employer of the limits to his possibilities with the help of the lending bank and you may be able to resolve this problem. Often the employers refuse such requests either out of ignorance of the scenario or sheer reluctance to get into probable and unwarranted hassels in future. If we are able to set at rest their fears the mplooyer may even agree for all that you know.
Best of luck.
Regards
samvedan
August 11, 2011
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From India, Pune
315It may sound harsh but under law the employer is NOT obliged to issue such a certificate to a NATIONALIZED bank nor such a bank has such a right under law! The bank is apparently enforcing its own rules despite having obtained two or more surities/guarantors from you. Unfair, unprofessional, unbusinesslike but true!!
However under Cooperative Societies Act u/s 49 the cooperative bank or society has a right to recover any outstanding from your wages and other dues as applicable. The employer cannot refuse to deduct relevant EMIs and to remit to such an institute as in case his refusal to do so the coop. bank/coop institute under law can proceed against the employer and recover the entire outstanding amounts as "arrears of land revenue".
But even this will be controlled by the provisions of the Payment of Wages Act and the Cooperative Societies Act. In any case the employer NEVER can be forced to underwrite your loan (like a surety) so that if the borrower defaults it will have to make good by repaying the loan. Deduction of relevant EMIs from earned wages, within the provisions of Payment of Wages Act and remittance to the institute only can be enforced but not by a nationalized Bank!
Trust your querry is answered. I suggest that you assure the employer of the limits to his possibilities with the help of the lending bank and you may be able to resolve this problem. Often the employers refuse such requests either out of ignorance of the scenario or sheer reluctance to get into probable and unwarranted hassels in future. If we are able to set at rest their fears the mplooyer may even agree for all that you know.
Best of luck.
Regards
samvedan
August 11, 2011
------------------
From India, Pune
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