jaimin shah (Finance Manager) (111 Points)
03 April 2012Example:
Processing Charge on working capital by bank :0.40% of limit or maximum 20 lac
Working Limit: 4.5 Crore original
Enhanced Working Limit: 7.5 Crore (Revised)
Query:
My query is that bank should charge processing fees on new working capital limit of 7.5 crore or only on the enhanced limit 3 Crore (7.5 new-4.5 old)??
and if charge on 7.5 then what is logic behind that??? urgent..
nitin
(CA Final student)
(75 Points)
Replied 07 May 2013
Banks generally have a sanctinaed period of 1 year for CC accounts....so Processing Fees charged by Bank are for 1 year.......if the client is enhancing cc limit at the of renewal den Bank wil charge P. fees on full renewal amt incl enhancement.................but if the enhancement is done be4 renewal period den Bank wil charge P. fees nly on enhanced amt................in your case if enhancement is done at the time of renewal of CC a/c den charge on 7.5 crore ...OR
if enhancement is be4 renewal period den charge on 3.5 crore
CAclubindia
