"MSMEs move RBI over loan foreclosure fees"

An association of small enterprises has approached the Reserve Bank of India (RBI) seeking relief on the high foreclosure and non-compliance charges levied by banks, at a time when wholesale price inflation is exerting pressure on working capital. In a letter to the central bank, the Federation of Indian Micro and Small and Medium Enterprises (FISME) alleged that HDFC Bank, Axis Bank, and Kotak Mahindra Bank have been using foreclosure and non-compliance charges to punish MSME borrowers looking for better terms and credit facilities elsewhere.“MSMEs are being subjected to very harsh and illegal foreclosure and non-compliance charges when they leave a bank and the banking ombudsman has failed to deliver justice to affected MSMEs.

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