Dinesh Divekar
Business Mentor, Consultant And Trainer
Aniket Pathak
Sr. Executive Hr
Nagarkar Vinayak L
Hr-consultant
+1 Other

Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network
Dear All,
Hopefully you all are doing well. Today, I have a query to ask. I request ans expect all to solve it as soon as possible.
One of my employee wants 20000 as loan from company and my company agrees for the same. Company made the agreement between company and employee stating that the sum amount will be deducted from the salary each month in equal installments with 10 % interest.
I need to ask that whether is this agreement is enforceable in court in case of non payment of loan amount on behalf of employee.?
2- what company can do if employee do not pay the loan amount back?
3- could company make contract for this?
4- the difference between agreement and contract?
Kindly Answer as soon as possible.

From India, Delhi
Dear Harish,
Just 2-3 days ago a post was raised by a member on non-payment of the loan given to the employees. Various members, including me, have given our views. I recommend you going through their views. The link of that post is as below:
https://www.citehr.com/598062-termin...loan-back.html
Thanks,
Dinesh Divekar

From India, Bangalore
Thankyou for your kind respond. I really appreciate your respond. But
I need to ask that whether is this agreement is enforceable in court in case of non payment of loan amount on behalf of employee.?
2- what company can do if employee do not pay the loan amount back?
3- could company make contract for this?
4- the difference between agreement and contract?
Please tell me about it.

From India, Delhi
Your advised go by the suggestion given by Mr Divekar. You get the signed "Agreement of loan" Notarized by any Notary Public which is legally binding. By this an agreement can be upheld in a court of law. In fact, any agreement between two parties can be enforced legally, whether the contract made was verbal or written.
From India, Mumbai
Dear colleague,
1.The agreement made on the stamp paper and notorised, is enforceable in the court of law.
2. Charging 10% interest on loan to the employee,is not in good taste as well as not in line with the prevailing practice since the company is not in money lending business. You may like to rethink about it.
Regards,
Vinayak Nagarkar
HR-Consultant

From India, Mumbai
Dear Harish,
There is nothing wrong in lending money to employee i the form of salary advance which can be recovered from his salary in the form of salary advance deduction. You don't even need to do agreement for that as you are already in the agreement of employment. The only part i don't understand that why you want to charge interest on that as it can be termed as advance and not loan.
If you are into money lending then straight away sanction him a personal loan with all the necessary documentation and deduct the same from his salary.

From India, Pune
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™