Bank Loan RecoveryPromotional
Loan recovery for lenders and defence for borrowers — notices, SARFAESI action, settlements and Debts Recovery Tribunal applications.
- Estimate Cost
- ₹25,000 – ₹2,00,000 Concessional Price
- Typical duration
- 60 days
Service overview
- Loan recovery is the legal process of getting back money that a borrower has stopped paying
- For a bank or financial institution holding security, the main weapon is the SARFAESI Act, 2002, which allows possession and sale of secured assets without going to court first
- For larger debts, the Debt Recovery Tribunal (DRT) is the forum; for smaller or unsecured amounts, a civil or summary suit, or an insolvency petition, may be better
Who needs it? / When is it needed?
- You are a bank, NBFC, co-operative lender, business or individual who has lent money that is not being repaid.
- A loan account has turned (or is about to turn) a non-performing asset after 90 days of default.
- Cheques have bounced, promises to pay have been broken, or the borrower has become unreachable.
- You are a borrower or guarantor who has received a SARFAESI demand notice or DRT summons and need to respond within the legal time limits. Delay hurts the lender: assets get sold, and limitation periods run.
What to expect from the WCP Professionals
- Read the paper first. WCP professionals study the loan agreement, security documents, guarantees, statements of account and every notice sent, to see what exactly is owed, what is secured and what limitation remains.
- Choose the forum. Secured loan of a bank or financial institution: SARFAESI notice, then possession. Debt of Rs. 20 lakh or more: an Original Application before the DRT. Unsecured or smaller sums: a legal notice, pre-litigation settlement and a civil or summary suit. Cheque-backed debts: Section 138 NI Act. Large defaults by companies: the insolvency route. WCP professionals tell you why one route beats another for your facts.
- Trace the borrower's assets early. WCP professionals map immovable property, bank accounts, receivables and guarantors, so that attachment applications can be made while assets still exist.
- Draft the statutory notice with precision. A SARFAESI Section 13(2) notice gives the borrower 60 days; defective notices are the most common ground on which recovery is later set aside.
- Handle objections. If the borrower objects, a reasoned reply must be given within 15 days; WCP professionals draft it so it stands up before the Tribunal.
- Enforce. Take possession, seek help of the District Magistrate or Chief Metropolitan Magistrate where it is resisted, and run the auction in the manner the law requires.
Key deliverables
- Read the paper first. WCP professionals study the loan agreement, security documents, guarantees, statements of account and every notice sent, to see what exactly is owed, what is secured and what limitation remains.
- Choose the forum. Secured loan of a bank or financial institution: SARFAESI notice, then possession. Debt of Rs. 20 lakh or more: an Original Application before the DRT. Unsecured or smaller sums: a legal notice, pre-litigation settlement and a civil or summary suit. Cheque-backed debts: Section 138 NI Act. Large defaults by companies: the insolvency route. WCP professionals tell you why one route beats another for your facts.
- Trace the borrower's assets early. WCP professionals map immovable property, bank accounts, receivables and guarantors, so that attachment applications can be made while assets still exist.
- Draft the statutory notice with precision. A SARFAESI Section 13(2) notice gives the borrower 60 days; defective notices are the most common ground on which recovery is later set aside.
- Handle objections. If the borrower objects, a reasoned reply must be given within 15 days; WCP professionals draft it so it stands up before the Tribunal.
- Enforce. Take possession, seek help of the District Magistrate or Chief Metropolitan Magistrate where it is resisted, and run the auction in the manner the law requires.
Standard turnaround time
- Notice drafting and dispatch: 3 to 7 working days.
- SARFAESI: the borrower gets 60 days from the Section 13(2) notice, and a borrower's appeal to the DRT must be made within 45 days of the enforcement step. DRT Original Applications are meant to be decided within about 6 months, but commonly take longer. Civil suits typically take 1 to 3 years or more.
Government fees, timelines & key outcomes
SARFAESI: no court fee for the Section 13(2) demand notice; the 60-day notice period and the 15-day period to reply to objections are statutory.
- DRT Original Application fee under Rule 7 of the DRT (Procedure) Rules, 1993: ₹12,000 for debts up to ₹10 lakh, plus ₹1,000 for every additional lakh or part, up to a maximum of ₹1,50,000
- Banks can approach the DRT only for debts of ₹20 lakh or more
Key outcomes: recovery or settlement for lenders; a fair settlement, restructuring or stay for borrowers.
Forms & filings involved
- Legal / demand notice and SARFAESI Section 13(2) notice
- Reply under Section 13(3A) to borrower objections
- Section 14 application to the DM
- CMM for possession
- Original Application under Section 19 of the RDDB Act before the DRT
- Section 17 application (borrower) and Section 18
- Section 20 appeals before the DRAT
- Civil / summary suit, or Section 138 NI Act complaint, where chosen
Documents required
- Loan agreement, sanction letter and security documents (mortgage, hypothecation, guarantee)
- Statement of account from disbursal to date with interest calculations
- NPA classification date and all notices sent
- Cheques, promissory notes or acknowledgements
- Identity and address details of borrower and guarantors
- Details of known assets and properties
- Board resolution or authority letter for company or bank officers
What we need from you
- Complete loan and security documents, and an accurate, reconciled statement of account
- The borrower's and guarantors' latest addresses, contact numbers and known assets
- A designated officer authorised to sign and attend hearings
Important conditions
- SARFAESI applies only to secured loans of banks and financial institutions; unsecured debts follow other routes.
- Limitation periods apply; stale debts may be barred unless acknowledged in writing.
Additional information
- A loan becomes an NPA after 90 days of default, which triggers SARFAESI rights.
- Insolvency proceedings have a high minimum default threshold and are best for companies with substantial debts.
- Lok Adalats and mediation can resolve recovery cases at low cost.
The estimated cost covers indicative professional fees only. Government fees, stamp duty and taxes are payable at actuals.
How it works
- 1. Raise a service enquiry describing your requirement.
- 2. A Relationship Manager reviews it and opens it for bidding.
- 3. Pay into escrow and assign the professional you select.
- 4. Track progress to completion, then accept and release payment.
Frequently asked questions
What is a Section 13(2) notice?
A SARFAESI demand notice giving the borrower 60 days to repay before the lender can take possession of secured assets.
Can a borrower object to a SARFAESI notice?
Yes. The borrower can file objections, and the lender must reply within 15 days with reasons.
How can a borrower challenge possession?
By filing a securitisation application under Section 17 before the DRT within 45 days of the measure taken.
Can a loan be settled for less?
Lenders often agree to a one-time settlement, especially for NPAs, based on the borrower's capacity and security value.