As a user of Kotak Mahindra Bank, if you’re unable to withdraw or transfer a certain amount from your account, your account might be marked with a lien. A lien, or a lock is put by the bank to keep your money on hold.
Typically, bank officials prevent this amount from being spent. It will stay in your account, but you cannot withdraw or transfer it to any other account. The lien amount will be blocked until the bank decides to release the lock on your account. There is no set limit for the locked amount, as bank officials have complete authority to hold the entire bank balance and convert it into a lien amount.
But, why?k
Why Kotak Mahindra Bank is Charging a Lien Amount?
There can be multiple reasons to mark an account with a lien. Here are the most common ones:
- A lien may be put in place to guarantee repayment of a bank loan if any EMIs are missed or are paid after the due date. The lien’s amount would cover the debt’s remaining balance.
- The bank has the right to place a lien for the full amount of overdue credit card bills on the account. This stops money from being used until debts are paid.
- Banks impose penalties by placing a lien on the shortfall amount if the minimum average balance is not maintained. When equilibrium is restored, the lien is released.
- A lien is placed to protect the bank from potential losses if checks issued on the account continually bounce or transactions are unsuccessful.
- The bank’s fraud algorithms can flag any transaction as questionable and place a lien on the account, blocking it until the matter is investigated.
- The IT department has the authority to order banks to impose liens on defaulters’ accounts if income tax is owed but not paid.
- The amount of your fixed deposit is a lien indicated as security against loan repayment if you take out a loan against it.
- Banks have to agree with any legal order from the courts to impose a lien on accounts in certain disputes or lawsuits.
What are the Lien Charges in Kotak Mahindra Bank?
Lien charges depend on multiple factors like default amount and bank account type. There is no fixed rate of lien charge. Based on the situation, the bank can lock the partial or complete account balance. You’ll able to see the balance online but can’t use it.
If ASBA has frozen your Kotak Bank account and SEBI has regulated it about an IPO request, you have to cancel the IPO to remove the lien mark. If not urgently needed, wait until the IPO allotment, as the lien mark will be removed immediately following the allotment.
When Kotak Bank places a lien on the account for a virtual card linked to the bank account, cancel the card and the lien immediately. If a lien mark exists on a credit card, you may either speak to a Kotak bank executive or cancel the card to remove the lien mark. If the tax department imposes a lien for nonpayment of taxes or skipped EMIs, return the default amount, clear the taxes, and remove the lien.
Either way, you first need to know the root cause of the lien charge in Kotal Bank. Then, you need to solve it immediately. If you are not able to find the reason behind the charge, pay a visit to the branch and clarify everything.
Conclusion
Kotak Mahindra Bank may charge a lien amount for various reasons, including repayment of missed or late EMIs, covering overdue credit card bills, penalizing for not maintaining the minimum average balance, etc. The charge is also made for protecting against potential losses from bounced checks or unsuccessful transactions and responding to flagged suspicious transactions. Lien charges vary based on the default amount and account type, with no fixed rate. So know the root cause and act accordingly to save your account from further penalties or deductions.