Muzaffarnagar, Mar 19 (KNN) In a series of cases against high handedness of Kotak Mahindra Bank being reported by MSMEs from across the country, the Bank seems to have stooped the lowest in retaining fleeing customers. 

Now to forcefully retain an MSME account, the Bank official of Kotak Mahindra freezed the account without informing the borrower and made the cheque of borrower bounce causing immense damage to the reputation of the hapless MSME.  

The latest case relates of Chkradhar Chemcials Pvt Ltd, Muzaffarnagar.   

“The action of the official of Kotak Mahindra Bank is criminal and I have lodged an FIR against the official. Further, I have submitted a representation u/s 35A of BR Act to the Governor, RBI vide letter dated 28/02/22 seeking dismissal of the said employee”, informed Neeraj Kedia, Managing Director of Chakradhar Chemcials. 

A series of complaints have been reported by MSMEs against Kotak Mahindra Bank to Federation of Indian Micro and Small & Medium Enterprises (FISME)- the national MSME body with a pattern.  

Whenever an existing dissatisfied MSME borrower from Kotak Mahindra wants to switch to another Bank, the Bank imposes foreclosure charges though the charges are not applicable in case of MSEs. If the MSME contests or files case in the Banking Ombudsman, the charges are duly withdrawn. Instead, the Bank then imposes ‘Non-compliance’ charges picking clauses in fine prints of loan agreement and levy a substantial amount usually between Rs.15 to 50 lac. These charges are withdrawn if the unit decides to put with Kotak and continues.   

Besides Chkaradhar Chemicals Pvt Ltd , Muzaffarnagar,  those MSMEs which have provided details of harassment by Kotak Mahindra include:  Rakshit Engineering Works Pvt. Ltd., Kanpur; Kanj Products Pvt. Ltd., Haridwar;  Maheshwari Agrofood Private Limited, Jodhpur and  Super Metals also from Jodhpur. 

“A small company does not dare the Bank unless pushed to the wall. We are a growing unit and Kotak could not provide us funds we needed therefore we opted for another Bank. We paid Kotak outstanding in full with interest including the foreclosure charges on the term loan on 05/01/22.  But Bank refused to give ‘No dues certificate’ and return original papers of securities. They went to the extent of freezing account and forced our cheque bounce”, laments Neeraj Kedia. 

FISME has consolidated the cases against Kotak Mahindra and brought them to notice of the Government through Ministry of MSME and Department of Financial Services, Ministry of Finance who are to meet on the issue in the coming week.  

The Federation may also issue an advisory to it 740 member MSME associations about malpractices of Kotak Mahindra Bank.