NEWS & ADVICE : HOME LOANS
ICICI charged for raising interest rate without informing
By Joseph Samson
Oct 30, 2008
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ICICI Bank has been asked to pay Rs 2 lakh by the District Consumer Forum as a compensation for its deficiency in services.

The complainant, Surinder Singh had availed a home loan of Rs 1 crore from ICICI Bank, which was to be repaid in 140 equated monthly instalments (EMIs) of Rs 1,26,676 each, through electronic clearing services (ECS). The complainant had ensured that his account always had a minimum balance more than one EMI. He had filed the complaint against the bank for charging him higher interest rates without any notice.

The complaint said that he was charged Rs 55,100 as processing fees and other charges for sanctioning the loan. ICICI also increased the interest rate from 9% to 9.5% and then to 10.5% without any information.

The complainant took another home loan of Rs 15,33,000 at a rate of 11% for which he was charged a processing fee Rs 8,604. The bank thereafter revised his EMIs for both the loans. The EMIs were raised to Rs 1,65,095 and Rs 27,232 because of an increase in the rate of interest as per the RBI's notification. Surinder had requested the bank to give him a copy of this notice but was left in vain. Further both his loans were converted into a single loan of Rs 1,24,00,000.

On the defence, ICICI Bank said that the compliant had opted for floating rate of interest which changes according to the market conditions and as per the RBI guidelines

However the forum found the fault on the bank's part and therefore directed it to credit Rs 33,000 in the complainant's account and work out the interest charged.

 


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