How Should Employers Handle Loan Defaults When Employees Abscond?

To Mr. Employee Name,

Employee Code:

You were inducted into the company on the date specified. During your tenure with the company, as per your request, the company transferred a general loan amount of Rs [Amount] for your personal work purposes. At the time of taking the loan, you committed to loan recovery from your monthly salary, an amount of Rs [Amount]. Without clearing the loan amount, you absconded from duties from April onwards. As of today, you have paid an amount of Rs [Amount], with a pending amount of Rs [Amount].

We have repeatedly requested you through phone calls to clear the loan amount. To date, you have not cleared the loan amount. This is the final reminder for you to clear your loan amount; otherwise, the company will initiate legal action against you.

Kindly pay the loan amount immediately.

Hi,

Why have you posted this here? I am not sure if it is for information, correction, or guidance.

You have not mentioned the value of the money transferred. Normally, when the value of such a loan is higher, companies tend to take a self-declaration from employees borrowing money on judicial stamp paper. They may also collect undated cheques for security purposes. If these documents are not collected, alternatively, you may withhold his full and final settlement until he makes the payment.