Banks face many critical situations as they handle multiple responsibilities. A bank NOC letter is one document used for several purposes, such as obtaining services from another bank, short-term loan, long-term loan, etc. To understand the importance and usage of this document properly, we’ll go through different sections of this blog post and explore what a bank NOC letter entails, who can ask for it, and when to use it. So let’s get started!
When a bank gives a “No Objection Certificate” (or “NOC” for short), it means that they have no problems with the loan closing. Your lender will send you a NOC letter to inform you that you have finished paying back your loan. It removes your debt and any legal problems that come with it. On the other hand, if you wish to end any schemes or want to join other programmes, you will need to write a bank NOC letter to the bank’s officials.
NOC is mostly used to show a ‘no issues’ sign. It can be used as legal evidence. For example, once the housing loans are repaid, a NOC from any lending firm is the proof of payment. It will allow you to collect all the property’s legal documents.
A bank NOC letter will also help eliminate a property’s lien. A lien on the property means banks or private lenders might sell your property until obligations are paid.
The most common reason banks ask their customers for a NOC letter is when they want to open a new account in another bank. When a customer wants to open a new account in another bank, the issuing bank will seek a NOC from the customer’s present bank. This is done as a precautionary measure to avoid any future dispute.
If you have an account in one bank and want to open another account in another bank with a new employer, then you may require a Bank NOC to avoid any issues. For example, if you have an account in XYZ bank and want to open an account in ABC bank, you might require a NOC from XYZ bank because it is highly unlikely that ABC bank will open an account if you have an active account at another bank. Apart from these, there are many other instances where you may require a NOC. Here is a list of a few instances:
• You want to apply for a credit card or take a bank loan.
• You want to open a joint account with a new partner.
• You want to open a new account after your existing account gets closed.
When applying for a NOC from a financial institution, you must use a formal letter format. Since this is an official letter, you must follow a few protocols. To better grasp the concept, please refer to the following format.
The address information comes first in your bank’s Notification of Change format. The format for a bank NOC letter requires always providing the receiver’s address, in this case, the Branch Manager.
In the Bank NOC format, the date will appear after your address. As this is an official letter, you must always provide the date.
The topic will be a single sentence that explains why you’re writing the bank NOC letter. Do your best to hone in on the core of the matter, so the reader needs a quick scan to get the gist.
In a Bank NOC letter, greetings will be more formal. In the greeting section of your letter, you should begin with “Hello, sir” or “Respected sir.”
The body of your Bank NOC letter is where you’ll explain the letter’s primary objective. Ensure the receiver gets all the relevant information by including your account number, contact number, complete name, and loan specifics.
In a Bank NOC, your signature will begin with a statement like “Yours truly” or “faithfully,” and your complete name will follow.
Sample of Bank NOC Letter
The Branch Manager,
Rajib Pur Branch, Gangarampur
Dakshin Dinaj Pur-733124 16 November 2022
Subject – Request letter for NOC
I’m Rana Roy, and I have an account at the Rajib Pur branch of XYZ bank. I’m writing to ask you for a NOC to approve my loan request. I have asked this bank for a loan of Rs. 1,000,000 to buy property.
I’ve been your customer for the past 5 years, and I’d like you to give me a NOC so my loan can go through. Here are my contact details.
Account no. – 56XXXXXXXXX76
Address – Nayabaazar, Gangarampur, Dakshin Dinaj Pur, Pin: 733215
Contact no. – 982464225
I have provided all the required documents with this letter. Please consider my request.
The Bank Manager
Market Building branch
Mahiboni Nagar, Kolkata-700312
Sub: Application for the closure of my loan
I have been continuing a savings account in your bank for 15 years. My account number is (mention your account number). I borrowed Rs. 10 lakhs from your bank to start my business. I was given an 8-year term and accepted all of the bank’s terms and conditions. Three years have passed, and I’ve paid Rs. 6 lakhs back, but I don’t want to continue the tenure. Now that my business is doing well, I’d like to shut it down by paying the remaining balance. I put down the money on January 31. Please give me a NOC certificate with all my information.
Also, please send me a letter saying I permit my loan to be paid off. I will need this for future reference. Given my situation, I hope you’ll send me the NOC certificate as soon as possible.
Tips for Writing a Better NOC Letter
Even if you know the important parts of a NOC, you still need to know how to write it well. Here are a few things to consider when writing a “No Objection Certificate”:
• Keep the letter short and to the point.
• Instead of using hard words, use simple language.
• Ensure you write down all the important parts of a NOC format.
• The tone of the bank NOC letter needs to be clear.
• It should be written on a letterhead every time.
A bank NOC letter is an important document that is required in several situations. Apart from these, a NOC can also provide information about the company’s or individual’s activities. A person or an entity issues a NOC letter to inform other parties that they do not have any objection to something.
