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I.CHEQUE
TRANSANCTIONS
1. Bouncing of cheque and
non-payment of the cheque amount when demanded
within the stipulated time would expose you to
criminal prosecution for an offence under S.138 of
the Negotiable Instruments Act. Simultaneously, the
drawee of the cheque can prosecute you for recovery
of the amount in a civil court. There is a statutory
presumption against the drawer of the cheque that
the cheque has been executed towards the discharge
of a debt or legally enforceable liability.
2. You cannot present a cheque
after six months of its valid execution.
3. Even if the cheque is dishonored on its
first presentment, it can be re-presented any time
during the validity of the instrument.
4. If there are several bounced
cheque issued by the same drawer and you are going
to file complaints in a court or different courts,
please mention the details of the similar complaints
you have filed against the opposite party. As per
the latest Supreme Court ruling,
this information should be given by the Complainant
as a mandatory requirement.
1. Negotiate with at least 10 banks.
2. Request in writing the formalities to be complied by you for obtaining a loan.
3. Obtain the copies of the agreements you have to execute and read them.
4. Keep all documents in original and keep a recent valuation of the property prepared by a certified Chartered Engineer/Qualified/Approved Valuer.
5. Offer the security only necessary to cover your debt. (Banker's always try to secure more collateral securities than necessary to
cover the debts)
6. Give full and correct cash flow statement to convince the banker how you are going to pay your debt.
7. Negotiate on fixed interest/floating interest with an eye on your short-term, mid-term, and long-term interest. (You can avail the help of a retired bank manager if needed).
8. Remember always that the SECURITIZATION AND DEBT RECOVERY LAWS give ample powersthe banks and financial institutions and it is very easy for them to take possession of the properties and sell them and your options are very limited in case of default in payment of your debt.
9. Guarantors must be doubly cautious that in case of any default by the borrower, they shall be proceeded against for the recovery of the amounts due to the banks/FIs as in the eye of law there is no distinction between the borrower and his guarantors.
10. Always keep a tab on your financial transactions with your creditors.
11. Always keep in mind your re-payment capacity.