What does ‘lien amount’ mean in a SBI financial savings account?: Has your financial institution put a lien on your account? Seeing a charged marked as ‘lien amount’? This article explains the which means of lien amount, the distinct reasons why your financial institution may placed a lien for your account, and what you want to do approximately it. It’s no longer most effective for SBI, but any financial institution.
Lien Amount Meaning
A lien method placing a lock. So, the lien amount is the amount which the financial institution has put a maintain on. That amount is frozen, and you can’t withdraw those budget or use them until the lien is eliminated.
The bank may also placed a lien on a specific quantity in an account, or at the entire account.
When does the financial institution area a lien?
The financial institution might also placed a lien to relaxed the funds for both of the subsequent motives:
Non-compliance of minimal stability requirements –
Most bank accounts have minimal stability requirements. Banks fee a penalty for non-compliance of them. If your account stability is decrease than the minimal stability required, the financial institution will charge you the penalty and robotically deduct the charge from your account. But in case your account doesn’t have enough balance to cover the penalty, the bank will area a lien to your account of that a whole lot amount.
Fixed Deposits as security for loans –
If you’ve got presented your time period deposits/ FDs as security in opposition to a mortgage, they may be marked as lien and you may’t withdraw them.
Bounced/non-payment of loan EMI –
If you default on a loan price, the bank can also vicinity a lien for your account of that quantity.
Most banks have the proper to area a lien on money owed held via them. So, in case you default on one payment, they could put a lien on funds in your different account within the same bank.
Problem with cheque or draft deposited by using you –
If there may be an difficulty with a cheque or draft on your account, the financial institution may put a lien of that amount till resolved.
Suspicion of unlawful interest –
The financial institution may additionally freeze your complete account in such a case. Or might also positioned a lien on a specific quantity. An example of that is non-payment of taxes.
Error generated by bank software –
This does manifest on occasion. You want no longer worry, it can be resolved.
You can also mark a lien to your account. You might also mark a lien to set a limit in your trading account. Or you could mark a lien on the time of subscribing for an IPO. That is to make certain which you have enough price range to be had in case you get allotted that IPO.
Can you withdraw the lien quantity?
No. You can’t withdraw the lien amount till you compromise the dues. Until the lien is lifted, you cannot withdraw or use the lien amount, and cheques issued on that account may jump.
How to clear up the lien?
After a financial institution marks a lien amount, you could put the specified balance within the account. Once you settle the liabilities, the bank will elevate the lien. After settling the lien, you can use the extra funds in your account.