Commitment charges on cash credit limit

This query is : Resolved

Vijay Goyal (Querist)
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18 August 2016 Axis bank has sanctioned Cash credit limit Rs 1 Crore to me subject to condition minimum utilisation 60% of sanction limit in case of under utilisation bank will charge commitment charges @ 2% per PA (Adject wording of sanction letter is as ' Commitment charges :- Commitment charges to be charge @2% PA on Quarterly basis on entire Unutilised portion if average utilisation is less then 60%)

I have utilised 48% limit in one quarter bank has charges penal interest on 100-48% = 52% portion
but as per HDFC & other bank calculation they are charging on 60-48=12%. ( Axis bank is not accepting this calculation)
Our bank is not considering the matter after senior VP of Axis bank have given verbal commitment on our application for waiver of full commitment chares and same will be credit in our account . but more than 9 month have been passed no action has been taken by bank after so many reminders

I want to know who is the right legal forum to resolve this matter.
and also want to know correct and legal method of commitment charges penalty calculation with Example ( please provide legal reference point link or copy )

please provide me the solution on above matter
thanks in Advance
Vijay Goyal

Amol S Joglekar

Amol S Joglekar (Expert)
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19 August 2016 Basically try to understand one thing that as per the LITERALIGIS of what you narrated in your query, AXIS bank seems to be in right mode of charging the charges as mentioned in the sanction letter. They have used the word "ENTIRE unutilised portion"....ok?
Now what you can do is EITHER accept your mistake that you did not clarify the doubt before signing the bank cash credit loan documents OR request for some concessions on the fear that you might move your account to HDFC etc. OR try your luck for Bank Ombudsman

Vijay Goyal

Vijay Goyal (Querist)
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19 August 2016 I think charging comment charge on entire unutilized portion is against the principle of natural Justice.
Please comment and suggest on which. Ground we. Have to put our case before banking ambudsman so they decide matter in our favour

Amol S Joglekar

Amol S Joglekar (Expert)
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19 August 2016 It is NOT against natural justice.... It is a mode of CALCULATION.
(It could have been against natural justice had there been NO clause of average 60% utilisation)
It is very difficult to get any relief from Bank Ombudsman except a pressure tactic against AXIS bank.

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