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Banks charging Pre payment charges for Cash Credit accounts of SMEs

Mayank Maheshwari (4 Points)

20 September 2021  
Hello Friends,

Pls support with your views related to the subject above.

My straight forward question is, can a bank charge payment charges on a cash credit account after the expiry of a valid sanction letter, or the tenure of generally say 12 months from the date of sanction, as the case may be.....

thanks

 4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (108890 Points)
Replied 20 September 2021

If the credit facility expired, or not extended, then they should not charge...

1 Like

Mayank Maheshwari (4 Points)
Replied 22 September 2021

Thanks for your reply Sir....

But any guideline/notification which clearly states this that they should not charge....

It will be helpful...

 

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (108890 Points)
Replied 22 September 2021

There is no such guideline/notification. Banks have their own working instructions.

Check your original loan appraisal letter for any such charges. If no specific clause of any such charging, then in that case you can complain it to Bank's Ombudsman.

Mayank Maheshwari (4 Points)
Replied 22 September 2021

Sir, the clause exists, but point is whether they can levy prepayment after expiry of credit facility.....
this needs to be still answered..... in legal terms, is this justified...?
I such thing levied, what's the procudue to sort...

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