Limitation period for bank loan outstanding for 5 years

[Dr. Ashok Dhamija]

The general legal provision for limitation period for filing a suit for recovery of money is 3 years. This applies to recovery of loans by banks also.

However, please remember that if your client has acknowledged the loan, paid any instalment or paid interest, etc., in the meanwhile, then the limitation period may start running afresh and will be counted from such date.

So, if your client has not acknowledged the loan or paid any interest, or paid any instalment, etc., to the bank, then the said loan may have become time-barred. But, if there is any such acknowledgement, payment etc. before the expiry of the limitation period, then the limitation period of 3 years will be counted from such date.

     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

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