I am looking for detailed information with respect to staff loaning and its applicable laws within India. If you can share with me an agreement regarding the same, it will be really useful. Any additional information you might want to add is welcomed.
From India, Mumbai
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From India, Mumbai
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Dear Bhawana,
Disbursement of the loan to the employee is an internal matter of the company. Each company has the freedom to decide on the amount of the loan, method of recovery, or the number of installments to recover the loan. The policy differs from one company to another. It is out of the purview of the labor laws of India.
However, if the employee enters into the agreement for the repayment of the loan and fails to do so, then the company can make a police complaint. However, it becomes a civil case and is out of the purview of the labor laws.
Thanks,
Dinesh Divekar
From India, Bangalore
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8219Disbursement of the loan to the employee is an internal matter of the company. Each company has the freedom to decide on the amount of the loan, method of recovery, or the number of installments to recover the loan. The policy differs from one company to another. It is out of the purview of the labor laws of India.
However, if the employee enters into the agreement for the repayment of the loan and fails to do so, then the company can make a police complaint. However, it becomes a civil case and is out of the purview of the labor laws.
Thanks,
Dinesh Divekar
From India, Bangalore
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Regarding staff loans, no applicable labor laws are in place. You may have to devise suitable HR policies for the proper administration of loans. You can introduce different types of loans, such as vehicle loans (for the purchase of 2-wheelers, 4-wheelers, etc.). Some companies have loan schemes like this, which are also interest-free, for the benefit of their staff. The only thing the staff need to ensure is that the vehicles purchased using the loan facility provided by the company shall have to be hypothecated in the name of the company until the loan amount is fully recovered. Some companies may impose a simple interest rate (lower than the bank rate) for staff loans.
Similarly, you can also introduce other loan options such as self-education loans, personal loans, marriage loans, for the benefit of staff, subject to a ceiling at the discretion of management, with the loan amount based on the staff's cadre.
From India, Aizawl
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Similarly, you can also introduce other loan options such as self-education loans, personal loans, marriage loans, for the benefit of staff, subject to a ceiling at the discretion of management, with the loan amount based on the staff's cadre.
From India, Aizawl
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Dear Bhavana,
I am not sure what was in your mind when you framed the question. Whether it was about giving loans and advances to employees or lending their services to other organizations.
Loans and advances to employees falling within the purview of the Payment of Wages Act, 1936, are covered by sections 12 and 12-A of the Act respectively. Additionally, certain State Shops & Establishments Acts have provisions regarding the sanction of loans and advances to the persons employed and the recovery thereof.
It would be helpful to receive a clarificatory response from your end.
From India, Salem
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I am not sure what was in your mind when you framed the question. Whether it was about giving loans and advances to employees or lending their services to other organizations.
Loans and advances to employees falling within the purview of the Payment of Wages Act, 1936, are covered by sections 12 and 12-A of the Act respectively. Additionally, certain State Shops & Establishments Acts have provisions regarding the sanction of loans and advances to the persons employed and the recovery thereof.
It would be helpful to receive a clarificatory response from your end.
From India, Salem
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