Srinagar, Jan 6: Jammu and Kashmir Bank on Friday clarified that the deduction of commitment charges was based on an industry-wide norm and was being charged on the sanctioned limits not availed by borrowers up to threshold levels.
Notably, a couple of days ago Kashmir Economic Alliance had expressed concern about the decision of J&K Bank to deduction of commitment charges from borrowers and had sought the intervention of the Bank authorities in this regard.
Meanwhile, in a statement, issued by the General Manager Credit J&K Bank AshutoshSareen said throughout its remarkable journey of over 84 years, J&K Bank has always empowered people and businesses by providing them with need-based finance.
“We have stood with our esteemed customers through thick and thin of times across our operational geographies, be it by way of extending facilities under the 2014 floods rehabilitation package or GECL and restructuring program under Resolution Framework 1.0 and 2.0 during the Covid19 pandemic,” he said.
He said regarding the concerns expressed by some of our borrowers on deduction of commitment charges, it is clarified that it is an industry-wide norm and is charged on the sanctioned limits not availed by the borrowers up to threshold levels prescribed by respective banks.
“But J&K Bank was not levying these charges till recently due to pandemic and other issues which had led to adverse audit observations.”
He further said now in line with the industry practice, we have automated the application of commitment charges.
“Having said that, since we believe our borrowers are an extended part of the J&K Bank family, we would request them to utilise all the sanctioned funds to enhance their businesses and earn more for themselves and those they employ in their enterprises.”
He also said in fact, as a goodwill gesture, the Bank recently reduced its rates of interest by 0.50 % to 1.00% w.e.f 1st December 2022 for all borrowers across all business sectors.
“Besides, for the convenience of its customers the Bank shall continue to review its policies that include easing the loan processing mechanism, reducing interest rates and other charges, especially in MSME and trade sector so as to minimize the cost of finance to its borrowers,” he added.