29/03/2026
Unilateral charges on CC accounts unacceptable: KTMF warns of escalation to Reserve Bank of India.
RBI Says, Jammu and Kashmir Bank Ltd Nirmala Sitharaman
Srinagar,29 March: Kashmir Traders & Manufacturers Federation (KTMF) has expressed its strong resentment and deep concern over the deduction of “commitment charges” from Cash Credit (CC) accounts by Jammu & Kashmir Bank. These deductions, imposed on working capital limits availed by traders have come as a shock to the business community particularly in the absence of proper disclosure, transparency and prior informed consent.
In a statement issued KTMF President Mohammad Yaseen Khan said, “Cash Credit facilities are designed to support the day-to-day operational needs of businesses, especially in a fragile economic environment like Jammu & Kashmir where traders are already grappling with reduced demand, shrinking margins and mounting financial stress. The imposition of additional charges on unutilized limits, despite borrowers already servicing interest on utilized portions is arbitrary in nature and places an unfair burden on honest business operators”.
While drawing attention to the regulatory framework laid down by Reserve Bank of India, Khan said, “it mandates that banks must ensure transparency in all charges levied on customers and that such charges must be clearly communicated at the time of sanctioning or through proper notice. Any hidden or inadequately disclosed charges are against the spirit of fair banking practices and customer protection guidelines issued by the RBI from time to time”.
Khan said, “the manner in which these “commitment charges” have been applied raises serious concerns about compliance with RBI norms, particularly those relating to fair treatment of customers, reasonableness of fees, and prior disclosure. KTMF, therefore urges Jammu & Kashmir Bank to immediately review this policy issue a detailed clarification regarding the applicability and calculation of these charges and refund any unjustified deductions made from the accounts of traders.
Khan stated that,”failing a prompt and satisfactory response KTMF will be constrained to take up the matter with the Reserve Bank of India and other appropriate regulatory forums and will explore all necessary measures to safeguard the interests of the trading community. KTMF reiterates that banks, particularly institutions with a strong regional connect must act as partners in economic growth rather than adding to the financial distress of the business sector”.
