Foreclosure charges for cash credit account

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This query is : Resolved

uma shankar (Querist)

20 November 2012 dear sir
we are in the manufacturing sector in coimbatore. we have availed a cash credit limit of 9 crores with yes bank ltd against properties and our stocks. yes bank ltd had sanctioned limit under PSL (PRIORITY SECTOR LOANS). At the time of sanction they have taken our signatures in sanction letter. we did not read any conditions in the letter. And they have also told usual conditions only. Now Karur vysya bank is willing to sanction 15 crores. when we approah yes bank for closing of account they said we will levy fore closure charges 2%. please clarify what is the rules and regulations for foreclosure charges regarding cash credity account? normally housing loan, term loan and mortgage loans only closure charges is charging. please give clarification.
thanks & regards

Amol S Joglekar

Amol S Joglekar (Expert)

20 November 2012 Banks are at liberty to charge the foreclosure charges. The better way is ask Karur vysya bank to allow you to keep a nominal balance say few thousands with YES bank. Else knock the doors of BANK ombudsman. You will get relief... but it is time consuming.

uma shankar

uma shankar (Querist)

20 November 2012 thank you very much Mr. Amol S.Joglekar. we are dealing with others banks also. All the other banks is not charging foreclosure charges for CASH CREDIT ACCOUNTS. Any body can tell us what is the RESERVE BANK OF INDIA'S rules and regulations in this regard? Banks are killing business people.

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