Jammu & Kashmir Bank have decided to substantially reduce commitment charges for traders and hoteliers for the period of nearly four years, from July 1, 2021 to March 31, 2024. This decision comes after frequent appeals by the Valley traders and hoteliers over the issue.
Waiver for Borrowers with Limits under Rs 10 Lakh:
As per a document, the commitment charges have now been reduced and the borrowers having a limit upto Rs 10 lakh will not be charged anything. This is a significant relief for small business owners and traders.
Reduced Charges for Borrowers with Average Utilization Less than 50%:
Borrowers having a limit of above Rs 10 lakh and having average utilization less than 50% will be charged 0.25 % (per annum) of the average unutilized limit plus applicable GST, with quarterly application. This is a substantial reduction in charges for those who have not fully utilized their loan amount.
Standard Operational Procedure (SOP) for Handling Commitment Charges:
The bank has designed a Standard Operational Procedure (SOP) for handling commitment charges related issues by the operative levels, which include the commitment charges have been levied in exempted accounts and exempted schemes. This will ensure that the charges are applied fairly and any discrepancies can be addressed and redressed.
Waivers and Concessions for Commitment Charges:
The bank has granted waivers and concessions in commitment charges for certain accounts. The branches shall ensure that the commitment charges as per prescribed rates are applied in all eligible accounts.
Exemption for New Accounts:
The newly opened accounts shall be exempted from charges application for 02 full quarters, excluding the quarter they are opened in.
Computation of Commitment Charges:
The commitment charges shall be computed and applied on the basis of drawing power fed in the CBS and not on the basis of limit sanctioned. This will ensure that the charges are applied fairly and accurately.
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