business

MSME association cautions members on Kotak Bank

MSME association cautions members on Kotak Bank

  • Mumbai: The Federation of Indian Micro and Small & Medium Enterprises (FISME), an association of small businesses, has issued an advisory to members, cautioning them on dealing with Kotak Mahindra Bank
  • The federation said that it has received complaints from several members in respect of practices followed by the bank, particularly at the time of closing of their account
  • “We have received 22 complaints against one bank
  • So, there must be something in the way the business is conducted or the internal structure
  • Whether it is foreclosure charges or non-compliance charges, these are shrouded in mystery and not very transparent and come up only when a customer wants to leave
  • That is why we thought of issuing this advisory,” said FISME secretary-general Anil Bharadwaj
  • He added that the idea is that members are forewarned before they have to face the burden of compliance charges
  • The body has listed several complaints
  • In one case, for a loan of Rs 3
  • 5 crore, Rs 59 lakh was demanded as non-compliance charges
  • It said that foreclosure charges ranged from 2% to 4% of sanctioned limits
  • Securities were not released by the bank
  • Another complaint was that promises to change loan terms were not fulfilled upon renewal
  • “FISME letter, that you have shared over email, makes unfounded allegations against our bank
  • FISME has concealed and misrepresented vital facts
  • We vehemently deny each and every allegation
  • Kotak Mahindra Bank never indulges in practices that are either against banking norms or are immoral or illegal
  • The bank serves numerous MSME customers across India and has always endeavoured to provide high-quality service to its esteemed customers,” said Kotak Mahindra Bank spokesperson Rohit Rao
  • Bharadwaj said, “We issued this advisory after writing to the CEO and each board member of the bank
  • Since we did not receive any response, we decided to go ahead
  • ” He added that if there were more complaints in response to the advisory, the association would decide its future course of action
  • Bharadwaj added that complaints have come from members across northern states, including Rajasthan and Uttar Pradesh
  • However, they have not received any written complaints from the southern states, but did get some calls
  • He said that they have not received similar complaints against other lenders, which led them to believe that this was not something to do with a change in industry practice or regulations
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business 2022-04-14 TOI