Delay payment on repayment of loan

[GIREESH CHAWLA]

Company has sent instruction to its bank for payment of installment of repayment of loan to lander institution on last date within normal banking hrs. Due to technical reason borrower bank could not execute RTGS on the same and do the RTGS on very next day. Lander bank get credit after a day from the stipulated date.

Would it be qualify for CARO compliance of default in repayment of loan or it is a simple procedural delay beyond the control of borrower.

[DR.MARIAPPAN GOVINDARAJAN]

In my view it is not a default because the delay is not attributed to you.

AI Summary

Attribution of delay: bank-caused payment lag does not constitute borrower default for CARO reporting when instructions were timely. When a borrower issues a timely instruction but the bank fails to execute a funds transfer due to technical reasons and the lender receives credit the next day, the delay is attributable to the bank and not the borrower; such bank-caused procedural delays should not be characterised as a default in repayment for compliance reporting if the borrower can show timely instruction and lack of causation.