Pre closure charges for cash credit account
uma shankar s
(Querist) 17 November 2012
This query is : Resolved
we are in the manufacturing sectors. our sector is under priority sector. we have availed cash credit loan with yes bank ltd against properties and stock. in the sanction letter they have mentioned preclosure charges 2% that they have not explained us at the time of sanction and urgently taken our signature in the sanction letter. now another bank is willing to sanction to our company. now yes bank people is telling that we will levy preclosure charges 2% which is mentioned in sanction letter. we know this information at the time of closing. other bankers is telling that no preclosure charges for cash credit accounts. please clarify
ajay sethi
(Expert) 17 November 2012
you are bound by terms and condition of loan . Yes bank had sepecifically mentioned that they will charge 2%as foreclosure charges .
you have on your own accord signed the loan agreement . under the circumstances you are bound to pay the charges
uma shankar s
(Querist) 17 November 2012
actually my question is whether all the banks are charging foreclosure charges for cash credit account? our new banker is saying that we are not charges foreclosure charges for cash credit accounts. normally banks are charging foreclosure for mortgage loans, term loans and housing loans only. what is rbi rules and regulations regarding PRIORITY SECTOR LENDINGS CASH CREDIT ACCOUNTS? ACTUALLY I HAVE ASKED WITH AXIS BANK THEY ARE ALSO TELLING THAT WE ARE NOT CHARGING FORECLOSURE CHARGES FOR THESE TYPE OF LOANS.
RAJU O.F.,
(Expert) 18 November 2012
Usually no body read the terms and conditions of the sanction order and also the agreements, documents.etc., executed at the time of availing of the bank loan. Bank officials also don't explain such conditions to their customers, before availing of the loans. If you insist to get copies of all such papers in advance before signing, they would not be happy and mostly they refuse. It is the fate of borrowers who approach banks and FIs.
In the instant case, as you have signed the acceptance to the terms and conditions of the sanction order for CC a/c better shift to another bank which offer better service.
Raj Kumar Makkad
(Expert) 21 November 2012
I have nothing to add in the opinion of Raju.
Rajendra K Goyal
(Expert) 03 December 2013
Repeated query:
http://www.lawyersclubindia.com/experts/Pre-closure-charges-for-cash-credit-account-352921.asp#.Up3XZ-KLq_I
