How does a Member Become Defaulter?

A. Defaulter by not paying his own loan.

1. If the loan installment is not paid within office hours by the 10th of every month, then penal interest at the rate of 3% is charged on the amount of the installment due.
2. If the payment of even one installment of the loan of the member is stopped then the concerned member becomes a defaulter.
3. A notice is issued by the society to the defaulting member, the postage expenses of which have to be borne by the member himself.
4. If the member's loan is irregular then it is sent to the concerned Department of RCS for Recovery. Once the case is sent to the registrar's office for recovery, police action is taken at the home and office of the debtor and the guarantors due to the recovery proceedings.
5. Due to this type of action, along with hurting the honor and dignity of the members, they also have to face humiliating and mental problems.
6. After the recovery case is initiated, a warrant is issued against the debtor and other concerned, on violation of which, under the rules, along with judicial custody, a decree is passed for the sale of movable and immovable property.

B. Defaulter Due to Guarantor

1. If a member does not pay his loan regularly then such cases are sent to RCS for recovery.
2. There are several stages to the recovery process. When orders for recovery of loan are issued even from the sureties, then in such a situation all the concerned sureties automatically become defaulters.
3. During recovery proceedings, police action is also taken at the houses and offices of the sureties. Due to which the surety's honor and dignity gets hurt and he also has to face humiliating mental problems.
4. In case of recovery, a warrant is also issued against the surety, on violation of which, under the rules, along with judicial custody, a order for sale of movable and immovable property is also passed.