I was looking to takeover my cash credit loan from hdfc bank to axis bank. Having completed all formalities, HDFC bank has claimed that they will charge me @4% of total loan limit as pre payment charges.
From the limit information that I have gathered, banks must not levy such charges as per notification no. RBI/2013-14/582
DBOD. Dir.BC.No.110/13.03.00/2013-14
The cc account is a floating rate account in the sense that it is linked to the base rate. It would qualify in the corporate sector as well. The only problem with the same is that i am using the funds from axis bank to repay the loan of hdfc bank. In my research, i had found that if the funds are repaid using own funds, the primary lender has no option but to release property documents. However, i am not assured about the source and logic of the same.
The sanction letter reads that
1) HDFC bank would levy annual charges, pre closure charges and penal charges in case of an event of default, as per the facility documents/ Master facility Agreement/term loan agreement.
2)working capital facilities are payable on demand and are subject to annual renewal. Renewal documents are to be submitted 60 days prior to the due date as mentioned above. Banks reserve the right to charge an additional interest @2% in case the documents are not submitted within the due date. This would be over and above any additional charge/penal rate, if any, that may have been levied to the Borrower.
I would be glad to get your input on the matter as to whether i would get relief if i approach ombudsman or go to consumer court. I have always negotiated in good faith and never presumed that the bank would resort to such underhanded means to take advantage of its clients. Thanking you for your time.
I have read and mentioned the terms and confitions in the post. These (2) points are the omly terms and conditions. I find them ambiguous. Do you think the bank has the authority to charge the prepayment charges in the given circumstance? Do these conditions allow the bank to charge the same?
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