Do you have an account with State Bank of India? Every account holder must know specific terms used by the bank. You may have a savings account, current account, fixed deposit account or a loan account.
Not only SBI, all other banks and financial institutions use some of the common terms like ‘Lien Amount‘.
Do you know what the Lien Amount is? In simple terms, the Lien Amount is the Lock Amount. SBI puts a lock on the amount, and the amount gets frozen. The account holders can’t withdraw the locked amount unless the bank removes the lien or lock.
The bank puts the lien for securing the funds for several reasons:
- The banks have a proposal of maintaining a minimum balance in the account. The account holders who fail to maintain the minimum balance pay penalty charges for non-maintenance. The bank will deduct the penalty charges automatically. But, if the account doesn’t have sufficient amount, the bank will put a lien on account of the penalty amount.
- If you deposited the FD as the security against a loan, you can’t withdraw the FD amount under any case as the bank marked it as the lien amount.
- If you failed to repay the EMI of a loan, the bank might place a lien on account of the EMI amount.
- The bank may also put a lien on the account if there is an issue with a draft or cheque. The Cheque/Draft amount will be the lien amount.
- If the bank finds out any unlawful activity in the account, it may freeze the account or may put a lien on a specific amount. The bank may put a lien in case you fail to pay taxes.
- The error of lien amount may show due to the bank software. In such case, it will automatically get resolved.
Unless you settle the bank dues, the bank won’t remove the lien. Until then, you can’t withdraw the amount or can’t even issue cheques as it will get bounced.
Once you settle the amount, the bank will remove the lien from the amount or account. To resolve the issue, you need to visit the branch and inquire about the procedure to do so.
You can also call the customer care of the bank and inquire about the matter. Remember! You can’t remove the lien from the FDs against the loans unless you repay the loan amount.