Pre payment charges on cash credit account
Ankit
(Querist) 27 April 2018
This query is : Resolved
I have an account with Oriental Bank Of Commerce with cash credit facility of 4.5 cr . In the sanction letter it is mentioned that prepayment charges of 2% will be charged one time in case of working capital loan is prepaid by the borrower for shifting to other bank / FI .
In this case my limit due date was for 26th April. I did not renew my limit and in advance gave a notice to the bank not to renew my limit because I will switch the bank. When today the other bank is ready to make payment of the used limit to my existing bank, OBC says that there is this clause and you need to pay the charges.
Please clarify the term of pre- payment in it. Right now they have stopped my DRAWING POWER.
So is it not wrong on the part of the bank to ask for charges. Kindly help me with the solution as I do not have to pay the pre payment charges
Siddharth Jain
(Expert) 28 April 2018
You'll be governed by what's written in the sanction letter signed by you. Kindly share a copy of the sanction letter at isidjain1@gmail.com which would enable me to advise you aptly.
Dr J C Vashista
(Expert) 28 April 2018
1. Show the agreement of loan/credit facility to a local prudent lawyer for better appreciation.
2. Being a commercial query you are required to engage a lawyer, which you can afford to pay. This site is doing a social service meant for needy litigants only.
BAALASUBRAMANNYAMM
(Expert) 28 April 2018
Mr. Siddharth Jain has rightly answered your query.
Kumar Doab
(Expert) 28 April 2018
The bone of contention is that as per your post you have duly informed the bank in advance before the expiry date and probably IT is not covered in the sanction letter,...and bank has resorted to interpretation by executive............
It shall be appropriate to get proper legal opinion from a very able LOCAL senior counsel of unshakable repute and integrity specializing in banking/civil/ matters and well versed with LOCAL applicable rules/laws and having successful track record…. and worth his/her salt ................by sowing all docs and communications on record...
Kumar Doab
(Expert) 28 April 2018
LCI experts Mr. Rajendra K Goyal, Mr. Mallipedi Jaggarao, Mr. Parthasarthy Longanathan are from legal cells of bank/Banking background.....
If you wish you can benefit from their counsel..
http://www.lawyersclubindia.com/experts/expert_point_complete_list.asp
http://www.lawyersclubindia.com/top_members_list.asp
