Can pending interest be shown as loan on renewal ?
Querist : Anonymous
Facts of the matter
One NBFC Listed company have given Loan/Inter corporate deposite to one private company for 60 days @24.% interest p.a.
The loan agreement was also executed and also the deed of personal guarantee.
then the borrowing company have asked for various extension to repay the same which lender company agreed .
But now the borrowing company have not paid interest for 5 months ?
QUERY
(1) can the lending company renew the loan agreement before expiry AND in the same agreement , can pending interest amount of 5 months be shown as LOAN by combining with principle amount ?? OR
2) can separate agreement be made for pending interest amount by showing it as LOAN ? OR
3) incase both the above option not suitable , pl.suggest most appropriate options.
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Making one more loan agreement with/without interest will not help the company practically.
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Better a case be lodged against the company to recover the amount.
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Only then the company would take it seriously to repay.
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Querist : Anonymous
sir , here my employer is not eyeing for case , but they just want to know whether it is legally acceptable and binding , if the interest amount is combined with loan in the renewed agreement which is also to be made before expiry ....
pls suggest
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(This is the most possible reason that they are interested in renewing the agreement).
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Since it is a public listed company; hence majority of money is belonging to the public.
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Now-a-days; companies are supposed to follow CORPORATE GOVERNANCE. Since it is a listed company; hence more care is to be taken towards this issue.
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Hence advise the management for the likely action by the government authorities in future.
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Querist : Anonymous
here the company wanted to penalize the borrowing company for not paying the interest which is absolutely in the interest of the public.
we wanted the opinion on the angle that can we penalize the borrowing company by adding pending interest in principle amount ?
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First of all please confirm whether the loan is outstanding for more than 6 months.
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For more information about the Non-Banking Financial Companies; you may refer the book published by BHARAT : MANUAL OF NON-BANKING FINANCIAL COMPANIES. Price approx Rs.1300/-
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