Dear Raviraj,
We had faced problems while employees availed personal loans from financial institutions.
While the financial institutions approached us for discussing their proposal we made it clear that the company will only recover the loan amount to the extent the employee earns salary. However, if for any reason the employee does not earn salary, the company will not make upfront payment for the loan amount and recover it later from the employee.
Likewise if the employee leaves the organisation the company will only send an intimation to this effect to the financial institution and the company will not liable for recovering the balance loan amount from the employees full and final settlement. Intially these institutions refused to accept our conditions but we were firm and finally a letter to this effect was signed by me and handed over to the financial institution and the duplicate was acknowledged by them. Subsequently when the salary fell short of the EMI or when the employee left we merely wrote a letter to the financial institution for recovering the amount.
As regards Maheswari's query you cannot recover any dues from the Gratuity amount and dues to the extent of salary, leave encashment, LTA and Medical reimbursement expenses alone can be recovered.
Never entertain personal loans from company as this will be difficult for you defend your case when the employee leaves the organisation. It is also advisable not to recommend any personal loan amount employeewise statement to any financial institution as this will be a document binding on the company.
M.V.KANNAN
We had faced problems while employees availed personal loans from financial institutions.
While the financial institutions approached us for discussing their proposal we made it clear that the company will only recover the loan amount to the extent the employee earns salary. However, if for any reason the employee does not earn salary, the company will not make upfront payment for the loan amount and recover it later from the employee.
Likewise if the employee leaves the organisation the company will only send an intimation to this effect to the financial institution and the company will not liable for recovering the balance loan amount from the employees full and final settlement. Intially these institutions refused to accept our conditions but we were firm and finally a letter to this effect was signed by me and handed over to the financial institution and the duplicate was acknowledged by them. Subsequently when the salary fell short of the EMI or when the employee left we merely wrote a letter to the financial institution for recovering the amount.
As regards Maheswari's query you cannot recover any dues from the Gratuity amount and dues to the extent of salary, leave encashment, LTA and Medical reimbursement expenses alone can be recovered.
Never entertain personal loans from company as this will be difficult for you defend your case when the employee leaves the organisation. It is also advisable not to recommend any personal loan amount employeewise statement to any financial institution as this will be a document binding on the company.
M.V.KANNAN