Friday, July 10, 2009

Consumer forum orders ICICI Bank to pay a penalty of Rs 1 lakh to the borrower and charge the same rate of interest to old and new home loans

After hearing the pleas, the forum held that the interest rate of any old loanee would be lowered to bring it at par with the interest rate at which the loan is advanced by the bank to its new customers

(Thanks Abhijeet for the link!) Deciding a complaint filed by Panchkula resident Birbhan Goyal, the consumer forum held on Tuesday that enhancement in the rate of interest in case of home loan is illegal and unwarranted.

Imposing a penalty of Rs one lakh, which the bank will pay to Goyal, the forum said, ‘The bank is directed to overhaul accounts of all its loanees and bring the rate of interest at par with those at which the loan (home) is advanced to new customers from time to time, so that all its customers, whether old or new, who have opted for adjustable rate of interest pay the same rate of interest during any particular period.’

Stating that the finance company and the bank adopted unfair trade practice, the forum, headed by Jagroop Singh Mahal, held, ‘Whenever enhancement takes place, the rate would not be more than that at which loans are being advanced to new customers, meaning thereby that if after enhancement, loan is advanced to any new customer at a lower rate, the rate of interest of the complainant and all other loanees would also come down to the same level.’
To read more, please, visit - The Times of India

Related Story:

A bank cannot offer differential rates for old and new customers if both have floating interest rate - RBI Deputy governor

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