amit kedia 24 October 2019

penal charges in takeover

i have a cash credit account with axis bank .i want to get my account to be taken over by federal bank .
i have not done renewal of my cc account from august.
since the sanction terms and conditions are invalid for non
renewal .can they charge penal interest.
further they have cheated me just to get my account to be taken over from union bank.
they said that i can deposit 1 crore in my account .
but suddenly after six months they reduced my cash deposit limit to 50 lakhs and this was one of my main reasons to shift to axis.
Furthermore they are stating that 2% penal charges will be levied.
so this 2% charge will be on yearly basis or it will be flat 2%.
i have a limit of 5.55 crores so how much will i be charged.

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2 Replies

SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 25 October 2019

Penal interest shall be levied from the date of expiry of the limit and till other bank takes over the liability.

G.L.N. Prasad (Retired employee.) 25 October 2019

You can apply for the take over the bank for CC limit, and that bank which agrees to take over makes such arrangements for transfer of that CC limit as per the laid down procedure. Do it as early as possible, before the account is disclosed as NPA, as once if it is declared as NPA, it is very difficult to take over the limit. Penal rate will be added (+) to your existing sanctioned rate of interest (Ex: if your present interest is 14% + 2% (app)= 16% on daily products compounded quarterly .-If the limit expired in Aug, from that date of expiry till Sept and from 30-9-2019, enhanced rate on that outstanding amount till next quarter.