Lien Amount Meaning in SBI & How to Clear Lien Amount?

Are you seeing a charge marked on your bank statement as ‘lien amount’? Every account holder should know some specific terms used by the banks. You must have known savings account, current or fixed accounts, or even a loan account. Many banks and financial institutions use a common term known as Lien Amount.

Lien Amount Meaning in SBI

In simple words, Lien Amount is Lock Amount. The bank puts a lock on the amount of the bank account holder and the account gets frozen. If the amount gets locked the account holder cannot withdraw the locked amount unless the bank decides to remove the lien or lock from the account.

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Reasons why the bank puts a Lien on the account

If you take a loan from a bank by investing the security of your Fixed Deposit, the bank puts a lien on that fixed deposit and when the deposit matures or if you decide to close the deposit before the maturity period, the amount is adjusted in clearing the liability of the loan account that is linked to the deposit and the balance amount is returned to the account holder.

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In general, the bank puts a lien due to the following reasons:

  • Non-payment of interest or EMI’s on loans
  • Due to credit card bill payment
  • Arrears on locker rent
  • Dues on any amount of the bank
  • If the bank realizes any type of illegal activity of the amount usage
  • Failed to make the tax payment
  • Issues of cheque or bank drafts

The account holder can also mark a lien on the account. This helps to set a limit if the account holder has a trading account. The lien can also be marked if the account holder is subscribing for an IPO. This ensures that the account holder has all the necessary funds available if they get allotted for the IPO.

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Can the amount be withdrawn if the account is a lien?

No, the account holder cannot withdraw the amount until the dues are settled. Even the cheques issued on the lien amount will bounce.

How to resolve the issue of Lien?

If the bank has marked the account as a lien you will have to deposit the required balance in the account. Once all the liabilities are settled, the bank will automatically remove the lien. On settlement of the lien, the account holder can use the additional funds of the account. If you do not see any type of liability on which the lien has been put, then the lien amount is used to settle it.

The best way to resolve the lock amount issue is to visit your home branch and ask them about the process to remove the lien. If you are not able to visit the branch, you can even call the customer care of the bank.

Sometimes, the bank places the lien on the amount on behalf of a third party to whom the account holder owes the money. In such a case, the bank puts the lien for few days. You will then have to visit the court and get the issue resolved. If the account holder does not take any type of action, the bank will give the lien amount to the lien-holder.

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If the lien is placed on fixed deposits against the loans, the lien will be there until you pay the loan.

How to get your lien amount back?

If the bank has put the lien because of any type of error, visit the bank and ask them to resolve the issue. The bank will resolve the issue and remove the lien.

If you are getting charged with the lien amount, it is not a good thing as this will disrupt the transaction from the account. Also, if the account holder fails to pay the money from one account then the money is deducted from another account that belongs to the same branch. This will help in money drainage. 

If you are putting your account money as a safety deposit against any of the fixed deposits, you will have to make sure that the bank is not charged with the lien amount. The bank has the right to stop the activities of your account by putting the Lien amount. Make sure that you are not breaking any rules of the bank.

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