Helping relative deal with ICICI Bank's recovery process where they're leaning on what's commonly called the "borrower first" clause
My cousin elder brother has a performing home loan with ICICI bank since 2022. The loan was about 40 lakhs. In 2025, due to some personal family matter he got into debt trap with loans totalling 25 lakhs from 11 banks and nbfc.
Now he has been settling with bank and NBFC. He has a budget of 10 lakhs. He has been negotiating well and the process is going smoothly except for ICICI bank.
ICICI is saying no settlement possible on the card since the home emi's being paid on time. The debt is around 3.2 lakhs on the card. His salary right now has not been lower to what it was before the war,he works in hotel industry, and is just managing to pay the home emi's on time with the help from his father pension payment. ICICI has issued loan recall notice and threatening sarfaesi action on the performing home loan emi citing borrower first clause of rbi, which is for banks internal provisioning and doesn't give them the right to invoke sarfaesi on a performing home loan .
Has anyone went through something similar to this? The family is preparing to seek legal counsel once the 13(2) notice lands and will file 13(3a) objection to it and if bank proceed with 13(4) , the lawyer will file SA with interim stay in drt.