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Asso.prof.(commerce & Management)
Nathrao
Insolvency N Gst Professional

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I am going for a personal loan, bank is asking a letter from HR . In letter, the main content should be "HR should inform bank when employee is leaving organization" . i need a letter regarding this. can anyone help me on this.
This letter in effect, is an undertaking to the bankers committing yourselves that in case the employee in whose favour the letter is being issued defaults/fails to clear the personal loan in arrears, your co. should pay up fully including accrued interest. So be aware of this, if necessary consult your finance before deciding.
In this situation there is a procedure in vogue in many cos. ie., the loan seeker may be asked to submit a counter guarantee from his colleague(s) so that co when Co suffer resultant financial commitments in case the defaulting employee vanishes without clearing. This is a prudent measure especially no compensating recovery is possible from F&F settlement like PF & Gratuity.
Reg. a template of such a letter, there should be a prescribed format available with the bankers and use the same once you decide to go ahead with it. Also get the draft cleared/vet it by your legal adviser.

HR needs to be very careful in signing such letters to bank.
First it sets a precedent.
Second a kind of implied responsibility arises regarding the loan.
Best will be to be very specific about the liability which company is ready to assume.Employee can even take the loan and abscond over which employer has no control and should not be saddled with liability.
The letter can just state that as and when employee leaves the company-whether on retirement or new job etc.
The responsibility of company is to the extent of informing the bank about his exit.
Your wordings in the letter should be clear and specific that no liability exists with the company in the event employee fails to repay loan.

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