(a) specify notice period before taking possession of security
(b) mention the procedure for taking possession of the security
(c) a provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the property
(d) the procedure for giving repossession to the borrower and
(e) the procedure for sale / auction of the property.
In the given case, you, the borrower should immediately mention in writing to the bank preferably through a lawyer that you are willing to settle the dues within a specified period (in a month as stated by him) and hence request the bank not to take any legal steps for recovery, like taking possession of the property.
In any case the bank has to take legal steps after serving sufficient notice to the borrower and can not arbitrarily take (or threaten to take) possession of the house.
In case you receive any legal notice, you will have to send a proper reply through a lawyer that you would clear all the dues within a specified period.
Views above are without any liability or commitment.
Sucheta Dalal Trustee - Moneylife Foundation
Suresh Prabhu Mr Prabhu retired as Senior Vice President from HDFC Bank
R Bhuvaneswari After serving Bank of Baroda for almost 40 years, Ms Bhuvaneshwari retired as Chief Manager in 2013.
Yogesh Sapkale Yogesh Sapkale is Deputy Editor of Moneylife and writes on finance, credit related issues
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