MUMBAI: The Federation of Indian Micro And Small & Medium Enterprises (FISME) has cautioned its members who are either existing customers of or those who want to switch to or from Kotak Mahindra Bank that a relationship with the bank comes with "hidden costs."
"Often a relationship with Kotak is seen to come with hidden costs, higher interest rates, excessive forex commissions, overcharging for routine services and poor service delivery," the Federation's advisory to its members' claims. The claims have been denied by the bank.
The Federation alleges harassment of MSME borrowers who intend to switch to other banks, raising exorbitant demands for foreclosure charges ranging from 2 to 4% of the sanctioned limits from MSME customers who wish to exit Kotak, not releasing securities nor issuing no-dues clearances, etc.
"...members are urged to protect their interests with the help of expert legal assistance to fully understand the risks that may arise in dealing Kotak," the advisory adds.
However, a Kotak Mahindra Bank spokesperson denied all the allegations.
“The Federation of Indian Micro, Small and Medium Enterprises’ (FISME) letter, that you have shared over email, makes unfounded allegations against our bank, " said Rohit Rao, Spokesperson, Kotak Mahindra Bank. "FISME has concealed and misrepresented vital facts. We vehemently deny each and every allegation. Kotak Mahindra Bank never indulges in practices that are either against banking norms or are immoral or illegal. The bank serves numerous MSME customers across India and has always endeavoured to provide high-quality service to its esteemed customers."