NPA Resolution & Settlements · Question

What does a demand notice from a lender require me to do?

Short answer

A demand notice is a formal written call from the lender asking you to pay the dues it states, usually within a period specified in the notice or by law, and warning of steps it may take if you do not. It requires you to read it carefully, check the figures, and respond in writing. This is general information, not legal advice.

In more detail

Receiving a notice feels alarming, but it is a structured document with identifiable parts. Reading it slowly is the first and most useful response.

Look for these elements:

The sender and the law or contract clause the lender relies on.
The amount claimed, the date it is calculated up to, and how it is broken into principal, interest and charges.
The period you are given to pay or respond.
The assets or guarantees the lender says secure the debt.
The action the lender says it may take if dues remain unpaid.

Notices differ depending on whether they arise from a loan agreement, from enforcement of security interests or from other proceedings, and the response period and consequences differ accordingly. Do not assume any notice is routine; note the date of receipt and the deadline immediately.

Make a response file the same day

Record how and when the notice arrived, keep the envelope or email, scan every page and share a copy with your advisor and any guarantors. Then compare the claimed amount with your own records of payments made.

A sensible response is written, factual and prompt. Acknowledge receipt, point out any errors in the amounts with supporting records, say whether you intend to propose a repayment arrangement, and ask for a meeting. If the notice relates to enforcement of security, there may be specific rights to object or to approach a forum within a stated period. A qualified lawyer can explain those for your situation, which is worth doing before the deadline passes rather than after.

Staying silent seldom helps. A notice does not decide the outcome, but missing its deadlines can narrow your options. The lender decides its next step, and no response can promise a particular result.

Key points

A demand notice formally calls for payment of stated dues within a stated period.
Check sender, legal basis, amount breakup, deadline and the actions the lender threatens.
Record the receipt date and keep every page and the delivery cover.
Reply in writing, flag errors with records, and propose a meeting or arrangement if appropriate.
Take legal advice early, since notices can carry time-limited rights.

Who this applies to

Borrowers who have just received a notice from a lender or its recovery team.
Guarantors named in the notice who must decide how to respond.
Finance heads responsible for reconciling the claimed dues.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.