NBFC Merger: What Happens to Your Loan, EMI and Mandate

"My finance company has merged with a bank. The app has changed, I got an SMS about a new account number, and this month my EMI was debited twice." If this sounds familiar, the short answer is: a merger does not change what you owe or the terms you signed; the new entity steps into the old lender's shoes. Your job is to confirm the change from an official source, check that your EMI mandate, loan account number and outstanding balance carried over correctly, and complain in writing if anything is wrong.

This guide covers mergers and amalgamations of NBFCs and banks, and the related situation where a loan is transferred or assigned to another lender. It is general information as of October 2026, not legal advice.

What actually happens in a merger

Under RBI's Non-Banking Financial Companies (Voluntary Amalgamation) Directions, 2025, an NBFC must get RBI's no-objection certificate or prior approval before going to the National Company Law Tribunal for a merger scheme under the Companies Act, 2013. For banks, amalgamations need RBI's sanction under the Banking Regulation Act. So a genuine merger leaves a public trail: RBI approvals, tribunal orders, stock exchange filings and notices on the lender's own website.

Your rights during and after a merger

• Same contract. The merged entity inherits the loan as it stands. A transfer cannot be used to rewrite your terms. RBI's directions on transfer of loans state that transfers must not change the underlying loan terms or contravene the rights of the borrower.
• Changes need notice and apply only for the future. Under RBI's Responsible Business Conduct Directions, 2025, any change in terms such as interest rates or charges must be notified to you in a language you understand and applied prospectively.
• No new charges outside the Key Facts Statement. Fees and charges not mentioned in your KFS cannot be levied without your explicit consent. A "migration fee" or "mandate change fee" you never agreed to can be challenged.
• Prepayment. For floating-rate loans to individuals for non-business purposes, no prepayment charges are allowed; a merger does not change that.
• Property documents. For secured loans, the merged entity must return original property documents within 30 days of full repayment, or pay ₹5,000 a day for delay attributable to it. The documents may now be stored in a different city; ask in advance where to collect them.
• Fair recovery. Collection and recovery must still follow RBI's recovery agent rules, whatever the new entity's name. See loan recovery agent harassment: your rights.

Step by step: what to check after the merger

1. Confirm the merger from official sources. Look at the lender's website, its stock exchange announcements if listed, and RBI press releases. Do not act on SMS links or calls alone.
2. Note the old and new loan account numbers. Ask the lender for a mapping letter or a statement that shows both.
3. Download a statement as on the day before the merger from the old app or portal while it still works, and the first statement from the new entity.
4. Reconcile the balance. Principal outstanding, EMI, rate, tenure and number of EMIs left must match across both statements (see the example below).
5. Check your EMI mandate. Find out whether the NACH or e-mandate was carried over or whether you must register a new one. If you register a new mandate, confirm in writing that the old one is cancelled.
6. Watch the next two EMI dates. Check that exactly one debit happens, for the right amount, and that no bounce charge is levied because of a mandate gap caused by the lender.
7. Update your payment details only from the lender's official app, website or a letter on its letterhead. Never pay to an account number sent on WhatsApp or by an individual.
8. Get one interest certificate for the year covering both entities, or two certificates that together cover the full tax year if you claim home loan deductions.
9. Check your credit report after one or two reporting cycles. The old account should show zero balance or "transferred", not "overdue", and there should not be two active entries for one loan.

Worked example: reconciling the balance

Suresh has a loan of ₹10,00,000 at 12% for 60 months. He has paid 20 EMIs when his NBFC merges into a bank.

The balance carried over correctly, but both the old and new mandates fired. Suresh writes to the lender asking for the extra ₹22,244 to be refunded or adjusted against principal, and for the old mandate to be cancelled. You can rebuild your own schedule and outstanding principal on our EMI calculator to compare with the lender's figures.

Where to complain

For credit report fixes, see CIBIL report error dispute.

What not to do

• Do not stop paying EMIs while you wait for clarity. Missed EMIs are reported as overdue whatever the reason; pay through the official channel and dispute later.
• Do not pay to any account that is not in the lender's own name, or to a UPI ID of an individual.
• Do not share OTPs, PINs or net-banking passwords to "update your mandate". The lender will never need them on a call.
• Do not register a new mandate without cancelling the old one, or you may be debited twice.
• Do not throw away old-lender documents. The sanction letter, KFS and pre-merger statements are your evidence of the original terms.

Key takeaways

• A merger does not change your loan terms; any later change needs notice and applies only going forward.
• Confirm the merger from official sources and save a pre-merger statement.
• Reconcile principal, EMI, rate and remaining EMIs across old and new statements.
• Watch for duplicate debits from old and new mandates, and for charges not in your KFS.
• Complain to the lender first, then the RBI Ombudsman after 30 days; report payment-diversion attempts to 1930.