Bringing respite to the traders, the authorities in Jammu & Kashmir Bank have decided to reduce the commitment charges substantially after the frequent appeals by the Valley traders and hoteliers over the issue.
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A top official in J&K Bank told the news agency—Kashmir News Observer (KNO) that the commitment charges have been substantially reduced for the period nearly four years from 01 July, 2021-31 March, 2024.
Earlier, the traders had appealed to the concerned authorities to take some favourable steps with regard to the commitment charges on unutilized loan amount of the borrowers.
As per a document available with KNO, the commitment charges have now been reduced and the borrowers having a limit upto Rs 10 lakh will not be charged anything while the 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.
The document further revealed that the borrowers having an average utilization of 50% to 70%, will be charged 0.10% (per annum) of the average unutilized limit plus applicable GST, with quarterly application.
“Subsequent to automation and application of commitment charges by our bank, certain issues have been raised and clarifications sought by the operative levels. Thus a need had been felt to have in place a detailed SOP for addressing and redressing such matters,” the document said.
As such, the bank has designed 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, the concerned Branch Manager shall be authorized to reverse the same.
The concerned branches shall ensure that the charges collection tab is punched as “Y” in all the accounts qualifying for application of commitment charges. Further, the concerned branches shall ensure that the commitment charges as per prescribed rates are applied in all eligible accounts, it said.
“The sanctioning authority has granted any waiver/ concession in commitment charges, such sanction letters shall be shared with the Service Operations team to create necessary exceptions in CBS by raising a ticket in CSS from Branch Manager user. Any discrepancy is reported/ noticed (by borrower/ auditor etc), the concerned branches shall seek computation sheets of commitment charges from the service operations team for ascertaining the same. In case of any anomaly, the branch shall reverse the excess charges after obtaining approval from the concerned Zonal Head.”
It said that the newly opened accounts shall be exempted from charges application for 02 full quarters, excluding the quarter they are opened in.
It said that 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. “In case of facilities granted for cyclic activities (Cold drink/ ice cream/ juice/ fruit trading or likewise), the operative levels shall educate such borrowers to apply for need based peak season and lean season sanction limits as per their requirement,” it added.
