Company Liability in Employee Fraud: Are We Responsible for Their Bank Loan Actions?

If a company issues an address proof certificate for an employee, and in the case of fraud by that employee in a bank loan case, will the company be liable as a guarantor or not?

It depends on the terms and conditions on which the loan was given to him, but I don't think the company can be held as a guarantor. In my opinion.

Dear Shiv,

Providing an address proof certificate and signing a guarantee are two different issues, so the Company cannot be called a guarantor if it has provided an address proof certificate. However, the Company should have made a reasonable inquiry before providing the said certificate.

Regards

Providing address proof can never make the employer a guarantor for the loan to be taken. Address proof only states that the employee is working for the organization and resides at the address mentioned as per the records submitted by the employee.

Why should a company issue the Address Proof when the employee himself cannot provide any proof for his temporary address? I feel that the company is not the authorized organization to issue the address proof. However, the company can request a self-attested affidavit about his residence and then issue the address proof from the company.

Please highlight the legal consequences if the company issues the address proof.

It will be better to mention, "This is as per the document or information provided by the employee. We do not conduct thorough checks of employee addresses," to be on the safer side.

This is what we follow at our company (Certificate for Address Proof). Kindly check with others also.

Dear All,

Nowadays, banks ask for certain documents as proof of address:

1. PAN Card forwarding letter
2. Passport
3. Voter's ID card
4. Driving Licence
5. Telephone Bill
6. Electricity Bill

The employer can request any of the above documents from the employee, which should be self-attested by the employee. Based on such documents, the employer can issue a certificate enclosing the self-attested documents received from the employee. This practice will help the employer remain in a safe zone in the event of any problems.

If an employee has such certificates, he/she will not require address proof from the company. The company can provide address proof to the employee as per their records without any verifications. There are no legal issues.