Banking

5 years ago

We are an MSME & have Cash Credit & Bank Guarantee Facility with GP cooperative Bank, fully secured against land, building, plant & machinery since last almost 4 years. They are giving me very poor service due to which I started transacting with other Banks.I ensured that the CC account interest was serviced regularly. However, the financial turnover dropped in the CC account on account of me transacting through other accounts. My submission of documents & compliances to GP Bank’s documentary requirement was more or less up to date. Some months before , due to a sudden cash crunch, I could not service the CC interest in time. However, the situation improved & I brought the account to regular status.I even deposited 75% of the sanctioned CC amount. After depositing the Amount, the Bank wrote to me that they had frozen both the Accounts of CC & BG.The utilization of CC was 25% & BG 55% at the time of freezing of the account.GP Bank has not called up the CC or BG accounts till date.
Interestingly the GP Bank issued us a Bank Guarantee during the tenure of the freeze on our account, which had been requested of them 5 months before ,
The other Banks I was transacting with are SBI & DNS cooperative Bank. The reason for transacting with these banks was of pure convenience. SBI account was opened before GP Bank sanctioned the facility. Hence GP Bank knew about the existence of this account for the last almost 4 years. Stock Audit conducted by the GP Bank Annually also mentioned the existence of the Bank Account.
The account at DNS Bank was opened last year & we failed to mention that we had a CC account with GP Bank. However, DNS Bank knew that we had the CC Account as they offered to take over the account from GP Bank. We have all the correspondence with the Bank regarding the proposed take over.GP Bank also knew of the DNSB Account on the same basis of SBI account.
After freezing our account GP Bank wrote to SBI & DNS Bank that we were defaulters & demanded that the banks close the account & transfer the balances in the account to GP Bank.
Both the said banks wrote to us enclosing the communication received from GP Bank & asking us to authorize them to comply with GP Bank’s request. DNS Bank however informed us that they had frozen our account & asked us for our authorization to remit the balance in our account to GP Bank. We wrote back to both banks protesting this letter from GP Bank & denying that we were defaulters, enclosing the latest bank statement of GP Bank as proof of our account being regular & we denied both banks authorization to transfer any funds in our account to GP Bank. We also informed them of the issual of the BG by GP Bank on the dates after they had claimed that we were defaulters.
SBI took cognizance of our letter & took no action on GP Banks demand. Interestingly.GP Bank issued a NOC to SBI to operate our account.
We have approached the Nodal Officer under the RBI’s Customer Grievance mechanism against DNS Bank’s Stand of freezing our account without notice to us & remitting our funds to GP Bank.
Even during the pendency of our appeal with the Nodal officer, DNS Bank have remitted the funds to BP Bank while informing us that they have kept a minimum balance , but the account is still frozen & asking us to get the NOC from GP Bank to defreeze it.We have in turn wrote back to them requesting them to close the account without prejudice to our right to approach the competent authority at their heavy risk & cost.
We will be following the steps upto Banking ombudsman for our grievance redressel after which we will file a suit for damages on account of loss of business, loss of opportunity, mental agony etc.against DNS Bank.
We request to know under what sections we should file the suit & where should the suit be filed & what are our chances of success in winning the suit