Jodhpur, Mar 16 (KNN) Competition means if you are unsatisfied with one service provider you can always opt for one who offers better services. Right? Wrong! 

Maheshwari Agrofood Private Limited a Jodhpur based MSME has learnt the lesson almost at the cost of its business. 

Narrating the ordeal before the Additional Secretary and Development Commissioner MSME Shailesh Kumar Singh, the MSME entrepreneur Jugal Kishor Jhanwar burst into tears as he rued for the day he opted for Kotak Mahindra Bank. 

Maheshwari Agrofood had the Cash Credit limit of Rs 5 crore along with overdraft of Rs 5 crore and a term loan of Rs 0.5 crore. Tired of Kotak’s tardy services, the unit wanted to change the bank.

“First, Kotak slapped foreclosure charges at 4 per cent amounting to Rs 32 lakh + GST and when contested that these charges are not applicable on MSMEs they reduced the penalty Rs 22 lakhs and stopped our transactions,” Jugal Kishore explained. 

“Officials of Kotak Mahindra bank pressure to continue at least for 24 months or else pay charges. They have made us bandhua majdoor ( bonded labour),” sharing the experience he cried  before the Development Commissioner on a tele-conference. 

The teleconference with DC-MSME was arranged by Federation of Indian Micro and Small & Medium Enterprises (FISME) as a series of cases of harassment by Kotak Mahindra have been reported by MSME units at the time of change of bank/ takeover.  

In most cases the Bank is alleged to impose  foreclosure charges. When MSMEs challenge them in Banking Ombudsman  or Consumer court, the drop it and instead levy non-compliance charges. The latter is always an afterthought and used as a stick to retain the MSME. 

As the security documents remain in possession of Kotak Mahindra the MSME unit cannot change the Bank also and have to put up with the excesses of Kotak. 

The office of DC MSME has agreed to take up the cases with senior officials of Department of Financial Services, Ministry of Finance to resolve the issue.  (KNN Bureau)