Bank enhancement
sujeet
(Querist) 03 September 2014
This query is : Resolved
Sir, we r dealer of yamaha and banking with BOI since 2010,due to market trend we had financial loss, we approach for enhancement but bank took seven months to give approval with Lot of request and follow up.After approval dispersal of fund in account was after six months. In these period they charged interest on Wctl and other charges were taken.In this period they took additional property as collateral.Again in Feb 14 we approach for enhancing the account, every required documents and relevant papers where furnished by us, but again they turned down our proposal after four months saying your request is not upto rbi norms as your company had financial loss in last audited balance sheet. But they physically know that it was due to their fault.
Please advice what shall we do.
Devajyoti Barman
(Expert) 04 September 2014
Grant of loan is sheer discretion of the Bank and you can not force them for the same.
If you have any grievance about charging some extra money or unreasonable amount unconnected with the loan then you can approach consumer forum.
Rajendra K Goyal
(Expert) 04 September 2014
Granting of loan is totally bank's discretion based on the guidelines of RBI, Bank, credit principles and so many other factors. Overlooking of any norm may put the sanctioning authority in trouble.
K.K.Ganguly
(Expert) 04 September 2014
1.If the Bank decides not to grant loan or takes time, they feel required, to decide for enhancing loan, then you can not call it as their fault,
2. Allowing or disallowing loan is Bank's discretion which you can not challenge.
malipeddi jaggarao
(Expert) 04 September 2014
It is a commercial loan, not under Priority Sector and hence considering the loan within a framed time limit is not applicable in your case.
As regards charges, they have every right to levy the charges as per the Bank's norms.
You have started your query that due to market trend your business in loss since 2010. Now you want to attribute loss because of delay on the part of the bank in considering the loan. Both are contradictory.
Banks can support your business, they cannot run your business. As regarding enhancement, normally they will make review of the account annually. As recently they have given additional limit, you will have to wait at least for one year.
The main criteria for sanction of cash credit limit is turnover through the account. The limits sanctioned/proposed should be on the basis of turnover. Though it is projected turnover, your past performance will be also seen and achievement of your previous projections will also be seen. You can not simply throw the blame on the bank for your failure.
Wait for some time. Show the required turnover and again re-approach the bank at right time for enhancement.
T. Kalaiselvan, Advocate
(Expert) 07 September 2014
Well opined by experts above, the bank will function on its own discretion, you cannot force the bank to grant you loan, when you found that the bankers are delaying the loan matter, you could have arranged to borrow the amount elsewhere and fulfilled your business commitments instead of depending on the bank and then blaming them. You are at a receiving end, so you should know your position. Try for loan somewhere else if this is not feasible.
