Banking terms can be super complicated to understand. Being aware of every banking term is next to impossible. We sometimes receive texts from our banks which includes extremely heavy words Like ‘STOPPED’, ‘HOLD’ and ‘LIEN’. We read these words and immediately panic and worry about what exactly has happened. How many of you have received an SMS from your bank saying that your account has been put on hold ? Or even stopped at times ? Have you opened your account details and seen that there is a ‘lien account’ marked ? If you get such a message from your bank do not panic. You start to panic as you think you might have to pay penalties for it.
But before panicking get to know every little detail and stay calm. We are going to help you with understanding these words better. Today we are going to discuss everything about hold, stop and lien. We are here to help you simplify these terms and how to tackle this situation properly. We will also further tell you how to remove the lien amount from various banks and also firstly how to check for the lien amount. Let us first understand what Lien amount is.
A Lien amount is basically the amount that is locked or freezes by your bank for some reason. The frozen or locked amount in your bank is not accessible for a specific period of time. The amount will still stay in your bank account inspired of being locked or freezed but you will not be able to withdraw that amount or even transfer that amount to another account. So basically the bank authorities restrict this amount from being used for a specific period of time. The lien amount will stay frozen until the bank authorities decide to remove the lock from your bank account. Also, there is absolutely no specific limit to the locked amount. The authorities of the bank have full rights to even restrict the entire bank balance and then this amount turns into the lien amount.
Firstly do not panic if you get to know that your account has been put on hold. There might be many reasons behind this situation. One of the major reasons behind your bank account being put on hold is ‘Dues on loans’. If you have taken a loan but there is no money in your savings account so the system will automatically lock the EMI amount. The second reason is also to avoid fraud. If the system notices any suspicious action or even fraudulent activity then it locks or freezes the amount for a specific period of time.
There are times when you do not have the locker rent money in your saving account so the banks puts a hold on your account. The fourth reason is one of the most common reasons and that is related to ATM transactions. Sometimes you withdraw money from the ATM but if that money is not debited from your bank account then the bank freezes or locks your account till the problem is resolved. One of the reasons can be pending KYC. In most of banks, you are supposed to do the KYC after every eight years. But if I’m case you fail to do so, then your account is put on hold or locked until further notice.
Let us first understand what is HOLD ?
Lien is exactly similar to Hold but it is only in because of the due amount on loans. So the bank puts a hold generally on a specific amount from your account. So only that specific amount is restricted and remains unavailable. This means that you can not use that amount until the situation gets resolved or until the bank removes the lock from your account.
Also, till then you can debit or credit money into your account. So normal transactions are allowed even when your account is put on hold. Let’s understand this with a real-life example using actual numbers.
Assume that you have a bank balance of Rs. 50,000. The bank has put a hold on Rs. 10,000 for some reason. So now until the bank removes the lock from this amount you will not be able to use this amount. Which means you can use the remaining amount of Rs. 40,000. You can withdraw or even transfer this amount just like before. But you will not be able to transfer or withdraw the entire 50,000. The amount of Rs. 10,000 will stay restricted. But you need not worry as once the situation gets resolved completely everything will be back to normal and you will still receive interest on the lien amount. So there is no reason to panic or worry. This is what happens when your account has been put on hold.
You might receive a message or an SMS stating that your account has been stopped due to pending KYC or due to any other reason. In case of your account is stopped, no transactions can be done. So the entire amount in your bank account becomes restricted. No sort of debit or credit will be allowed in that account until it is released or the situation is resolved. The reasons behind this might be pending KYC, police complaints, fraud, etc. Also, your account is stopped when the system notices any sort of suspicious activity or unusual transactions. These are the major reasons why your account can be stopped. But once the issue gets cleared everything will be back to normal.
What exactly are Lien marks and understanding Lien amount better ?
As we mentioned above the Lien is exactly similar to the Hold. The lien amount is the locked or the frozen amount which might be because of due loans. This amount is locked or frozen only for a limited period of time. The other thing you should know is what a lien mark on a bank account means. When the borrower permits the lender to lock the amount in accordance with the recovery of money is called a lien mark. This happens mostly when the borrower fails to repay the amount in the given period of time as per the agreed terms and conditions.
This lien mark is usually used by the lender for security. But you still can use the remaining amount in your bank account in spite of having the lien mark. This is because the lien mark is only on the specific amount. So only that specific amount is restricted and remains unusable until further notice or until the problem gets resolved. Now that you have understood what is lien amount and the lien mark you should also understand why the bank might put a lien mark on your bank account.
So if you have take a loan of a certain amount and the monthly EMI for that loan is Rs. 20,000. Assume that the total bank balance is Rs. 80,000. So if you forget to pay the EMI this month your account will be marked as a lien account. So this monthly EMI amount of Rs. 20,000 will be restricted for a certain period of time. You can still use the remaining amount of Rs. 60,000 because that amount will not be restricted. Now I am assuming that you must have understood this clearly with the help of this real-life example.
Now what after your account has been marked as a lien account?
You should take action to remove this mark from your account. In some cases, you will have to visit the bank and you will also have to speak to the branch manager to understand the entire process and resolve the situation. So get in touch with your dedicated bank relationship manager, ask and understand the reason why it happened in the first place, raise a concern and remove the lien amount from your account. Now to make the process simpler for you, we will walk you through how you can remove the lien amount from a few banks.
How to remove the lien mark from your State Bank of India’s account ?
Yes. The hold is put only on a specific amount. So you can access the remaining amount in your bank account inspite of it being put on a hold.
If you have paid all of your dues and have absolutely no amount pending then in this case there might be a system error. The best option in this case is to visit the bank and find out the relevant reason and remove the lien mark from your bank account.
Yes. If you clear your due taxes and if this is reason behind the lien mark then definitely the lien mark will be lifted from your bank account.
You will first have to find out the reason behind the lien mark. Usually the lien mark stays until the entire issue has been resolved, in cases of pending EMI’s the lien mark is lifted once the pending payment is completed.
The preventive measures are that pay your taxes on time, make sure that there is not any suspicious activity, take care that you pay your monthly EMI’s on time and that your cheques do not bounce. Once you make sure that all of these measures are taken, you can absolutely avoid lien marks being put on your bank account.
