BANK"S Take Over Process

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Takeover process is generally cumbersome and takes a lot of time and effort. The process starts when the takeover Bank requests the Individual interested in getting his liabilities transferred to get a Liability Certificate from his existing Bank or Financial Institution. Once the Liability Certificate (LC)  is issued by them which can take anywhere between 5-10 working days (generally comes with an expiry date) is submitted to the takeover Bank who will provide a Loan amount based on the individual's financials.

From the Loan amount provided, a manager's cheque is issued to the existing Bank of that individual to settle his liabilities with them completely. The manager's cheque along with the  copy of LC and a letter from the takeover Bank is submitted by the individual to his existing Bank or Financial Institution.

The existing Bank accepts the cheque, settles their liabilities which can be a loan or a credit card or both and issues a No Liability Certificate to the individual confirming that his liabilities with them are now settled.



This certificate is generally issues in the name of the takeover Bank and cannot be collected by the individual, it has to be collected by the representative of the takeover Bank by providing ID proof.

Bank or the Financial Institution then provides a copy of the No Liability Certificate to the individual to go to his or her employer to get a salary transfer letter which is generally know as STL. The employer requires this clearance letter to be able to transfer his or her salary to a new account as provided by the new Bank or Financial Institution.

The above mentioned process in full is the takeover process and every Bank may or may not follow this process. Further any amount that is granted to the individual after settling the other Bank liabilities is kept on hold till the STL is received and the first salary transferred to the takeover Bank.

Kindly note that your EMI starts on the date mentioned in your Loan application irrespective whether or not your takeover process is completed. There may be situations wherein you have to deposit cash in the other Bank account to cover for your EMI as your salary may not yet be transferred to your new account due to the complexity and the time taken in completing the required formalities for a take over process.

Sometimes, takeover process can take upto 6 months and you need to be prepared and should measures the pros and cons of leaving your existing Financial provider and joining a new financial Provider or Bank.