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I have two accounts with a bank: one is a home loan, and the other is a cash credit (CC) loan. Due to a delay in the CC loan renewal, it was classified as a Non-Performing Asset (NPA). As a result, the bank has also classified my home loan account—although unrelated and regularly paid—as NPA. The bank is now threatening to take possession of my house under the SARFAESI Act. The home loan is not linked to the CC account, and the house is not collateral for the CC loan. Can the bank issue a SARFAESI notice for the home loan account even though it is a standard, separate account and not collateral for the CC loan?
The bank cannot declare a standard home loan as NPA just because another loan like a cash credit account turned NPA, especially if both are unlinked and secured separately. Send a written objection and file a complaint with the Banking Ombudsman or RBI. The SARFAESI Act applies only to the secured NPA asset, not others. For further legal assistance contact us on our helpline number.