Legal Question in Banking Law in India

If a company has not requested for renewal of working capital limits in existing bank and account was taken over by other bank after the expiry date whether earlier bank has right to recover foreclosure charges as per earlier sanction letter as effective date of those terms are binding till renewal due date.

Asked on 6/14/16, 8:45 am

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1) Whether or not credit limits are renewed, its continuance is a deemed renewal in the absence

of change in terms and conditions of sanction. Ur continuous operation of the a/c is ur acceptance.

2) When the existing account is taken over by the other bank, the earlier bank is right in recovering the

foreclosure charges.

Answered on 6/14/16, 9:06 am

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15.06.2016

Dear Sir / Madam,

No, since the Account has been taken over after the expiry date, the existing Bank is not entitled to foreclosure charges.

Regards,

Answered on 6/14/16, 4:34 pm

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