I am stuck in a very bad situation with my current banker - Yes Bank.
Another banker ICICI bank has transferred the balance for takeover. But Yes Bank is applying prohibitory foreclosure charge of 4%.
I had taken a Term Loan of Rs. 2 Cr from the bank for setting up my manufacturing business in 2022.
I have used only about 60 L of the loan, and I am transferring the same despite having spent nearly Rs. 5L the first time while taking the loan due to processing charges, stamp duty etc. I am looking at spending another 2L in transferring due to having to pay stamp duty without considering foreclosure charges, but I am ready to pay this because I am not getting any service from the bank.
How do I contest the foreclosure charges with the bank? I was informed that for MSME a bank cannot charge foreclosure charges. Is there any notification that can substantiate the same.
After the loan was sanctioned i have had a nightmarish experience with the bank.
They have disbursed Rs. 60 L of the total sanction limit of Rs. 2 Cr.
As per the sanction letter - "The borrower hereby unconditionally agrees, accepts and acknowledges that the Borrower is liable to pay charges at the rate of four percent of the total limits sanctioned in case the facilities are taken over by another bank during the tenor of the loan. For Term Loans it would be charges on Principal Outstanding as on Date. This will not apply to the Customer(s) if they comply with the conditions as may be stipulated in the relevant regulatory guidelines before the process of takeover with the bank"
There is Banking Code of Conduct of 2015 for MSME that states that Banks should not charge penalty for pre-payment. - Can I use this?
I have already sent them my MSME certificate through the RM, but learnt that request of waiver of foreclosure has been denied
Main service deficiencies were as follows.
- Delay in payments to vendors - The bank would take 1-2 months to make payments. At the last moment they would give flimsy excuses, like there is a mistake in request letter or format is wrong, or approval team has gone for foreign trip. My loan was sanctioned in July 22, but i did not get the first disbursement till October 22. The RM would give a date on which the payment will be made, and on that date he would say that something is wrong in the Request letter so we have to give the application again.
- Forced to take expensive term insurance - The bank forced me to purchase a Rs. 1 L term insurance even though i protested. All this was done after loan was sanctioned. They did not disburse any payment till i paid for this.
- RM asks for monetary benefit and gifts for clearing payments - RM had asked for a mobile phone to be given to someone in the approval team in exchange for approving the case. He has been asking for monetary gift in exchange of payments later also.
- Mis information - I was asked to create a 5 L FD and told that i can close the FD after 1 year. Even after 1year i cannot close the FD because there is a lien attached.
- No advance payment, No reimbursement - For factory construction i have to make several payments to vendors like to purchase TMT bars and Cement. Now none of these vendors will supply without advance, the bank refuses to make advance payment. I requested them to reimburse me if I pay with my funds. But that also is refused.
Another banker ICICI bank has transferred the balance for takeover. But Yes Bank is applying prohibitory foreclosure charge of 4%.
I had taken a Term Loan of Rs. 2 Cr from the bank for setting up my manufacturing business in 2022.
I have used only about 60 L of the loan, and I am transferring the same despite having spent nearly Rs. 5L the first time while taking the loan due to processing charges, stamp duty etc. I am looking at spending another 2L in transferring due to having to pay stamp duty without considering foreclosure charges, but I am ready to pay this because I am not getting any service from the bank.
How do I contest the foreclosure charges with the bank? I was informed that for MSME a bank cannot charge foreclosure charges. Is there any notification that can substantiate the same.
After the loan was sanctioned i have had a nightmarish experience with the bank.
They have disbursed Rs. 60 L of the total sanction limit of Rs. 2 Cr.
As per the sanction letter - "The borrower hereby unconditionally agrees, accepts and acknowledges that the Borrower is liable to pay charges at the rate of four percent of the total limits sanctioned in case the facilities are taken over by another bank during the tenor of the loan. For Term Loans it would be charges on Principal Outstanding as on Date. This will not apply to the Customer(s) if they comply with the conditions as may be stipulated in the relevant regulatory guidelines before the process of takeover with the bank"
There is Banking Code of Conduct of 2015 for MSME that states that Banks should not charge penalty for pre-payment. - Can I use this?
I have already sent them my MSME certificate through the RM, but learnt that request of waiver of foreclosure has been denied
Main service deficiencies were as follows.
- Delay in payments to vendors - The bank would take 1-2 months to make payments. At the last moment they would give flimsy excuses, like there is a mistake in request letter or format is wrong, or approval team has gone for foreign trip. My loan was sanctioned in July 22, but i did not get the first disbursement till October 22. The RM would give a date on which the payment will be made, and on that date he would say that something is wrong in the Request letter so we have to give the application again.
- Forced to take expensive term insurance - The bank forced me to purchase a Rs. 1 L term insurance even though i protested. All this was done after loan was sanctioned. They did not disburse any payment till i paid for this.
- RM asks for monetary benefit and gifts for clearing payments - RM had asked for a mobile phone to be given to someone in the approval team in exchange for approving the case. He has been asking for monetary gift in exchange of payments later also.
- Mis information - I was asked to create a 5 L FD and told that i can close the FD after 1 year. Even after 1year i cannot close the FD because there is a lien attached.
- No advance payment, No reimbursement - For factory construction i have to make several payments to vendors like to purchase TMT bars and Cement. Now none of these vendors will supply without advance, the bank refuses to make advance payment. I requested them to reimburse me if I pay with my funds. But that also is refused.