Non-repayment of loans can lead to heavy penalties, court disciplines defaulter
Many people believe they can take out loans without worrying about repayment, assuming no serious consequences will follow.
image for illustrative purpose
Bengaluru: Many people believe they can take out loans without worrying about repayment, assuming no serious consequences will follow. However, a recent case in Andhra Pradesh has shown that defaulting on loans can lead to severe legal repercussions.
Navi Finserv, a financial services company, took a customer to court for failing to repay a loan. The court ruled in favor of Navi Finserv and imposed a penalty of Rs. 83,000 on the defaulter, with a threat of six months' imprisonment for non-payment. Under Section 25 of the Payments and Settlements Systems Act, 2007, an eNACH bounce—when there are insufficient funds in a bank account for an auto-debit—is treated similarly to a cheque bounce. This offense carries heavy fines and can lead to imprisonment for up to two years.
This case serves as a strong reminder that loans are not free money. Failing to repay them can result in fines, property seizures, and long-lasting consequences. Defaulting on loans can severely affect your financial future, making it difficult to obtain new loans, find employment, or even secure basic documents like a passport.Always repay loans on time to avoid long-term financial and legal troubles.
