1. The best news of the century - Bank fined Rs 10 Lakhs for denying credit cards to Advocates :D
Banks can’t deny loans on basis of jobThe TOP consumer court in Delhi on Friday slammed banks for denying services like loans and credit cards to people of select professions, like lawyers and journalists.
The Delhi State Consumer Disputes Redressal Commission gave the order in a case of a lawyer who had complained that a bank had rejected her application for a credit card because of her profession. It imposed a fine of Rs 10 lakh on ICICI Bank for “defaming and demeaning the legal profession” by rejecting Nivedita Sharma’s application, citing she had a “negative profile”.
The court said lawyers and journalists are often denied loan facilities by banks. “The apparent reason is that lawyers and journalists do not take illegal or arbitrary acts of banks lying down and challenge them in courts. Banks know they cannot play games with them,” a bench headed by Justice JD Kapoor said.
There are more than 45,000 lawyers and 5,000 journalists in Delhi.
“Such a policy reflects the mindset of banks as private officials, peons, clerks and even vegetable vendors are extended loans but not advocates or journalists with sound financial standing,” the court said. “It is an act of corporate authoritarianism.”
The court said such discrimination should be stopped at once. The only criteria should be fulfillment of RBI guidelines and financial standing and creditworthiness of a person, it said.
It rejected ICICI’s claim that it had the discretion to choose customers.
An ICICI spokesperson said they would appeal against the order. The bank admitted that the lawyer’s documents were returned with a note, “negative profile”, but it was not an “attempt to undermine her position”.
http://www.hindustantimes.com/StoryPage/Print.aspx?Id=868907b0-f60c-4738-9c4d-4964ec7f7aba
Conclusion: This is really a great decision… unfortunately when I applied for ICICI Bank Credit Card and mentioned I am advocate I did not get any response back… And on enquiring, I was told they never recived any form in my name !!!
I am really happy to read this reasoning… “The apparent reason is that lawyers and journalists do not take illegal or arbitrary acts of banks lying down and challenge them in courts. Banks know they cannot play games with them,”
Because when the same I communicated to a CTIBank customer care employee Sandeep Kumar on 25 Jan 2008, I was threatened back… “Should I tell you why we do not issue credit card to the lawyers”… CITIBank is already in the court against me… and I would grill them… next date 10 April 2008
2. Lost in Delhi District Consumer Court - I had prepared all the documents for the case
ICICI Bank has lost out in a Delhi District Consumer Forum in a Car Loan matter… as Bank tried to cheat the customer ,Mr Sushil Kumar Sharma, by charging 2 extra installlments of around Rs 4,500 each, which are liable to be paid back with interest from Feb 2002 and a compensation of Rs 10,000 + Litigation Cost Rs 2,000… i.e. total amolunt of Rs 27,000 - 28,000 (approx)
If you have ICICI Loan in any form… please go through the papers again… !!!
3. ICICI Bank files false Criminal Case against Mr Anil Mehta, a Delhi Resident
Mr Anil was shocked to receive a summon from Tis Hazari District Court… wherein he is being sued for bouncing of cheques, when the issue has already been settled with bank withh all the payments being made way back in 2006 and even NOC was issued by ICICI Bank… even Hon’ble court has criticized the Bank for harassing the customer and Bank will be exposed very soon…
Updated 25 Feb 2008
4. ICICI slapped Rs 1,000 cost for not filing reply
Case # 759/07 at Consumer Dsiputes Redressal Forum III in Vinay K Agarwal, court slapped Rs 1,000 as costs for not filing reply in time, since case started in August… and warned that case would be proceeded exparte, if the reply is not filed on the next date.
Hon’ble Court reminded the Bank that consumer courts are for speedy trial and such a behavior is not acceptable… and showed intention to proceed ex-parte, but the Bank’s lawyer pleaded for last opportunity !!!
Updated 20 April 2008
5. ICICI slapped by Ombudsman - ICICI Bank’s Monopolistic, Restrictive, Unethical, and Unfair Business Practices by Mr Parag Palsapure
I incurred losses of over Rs. 1.6 lakhs (including extra interest paid), in addition to me and my wife spending harrowing 4.5 years fighting against the injustice by mighty ICICI.
I had registered the complaint with Banking Ombudsman (Reserve Bank of India) in Jan 2006, who passed an award in my favor in Sept 2007 on the three of the 11 points in my complaint (the rest do not come under Banking Ombudsman scheme), and was advised me approach other legal means for other points.
However, despite RBI’s instructions, ICICI Bank did not honor the Ombudsman’s award, and I made an appeal with the Dy. Governor of RBI to look into the matter last year. The case is still pending.
Since I did not default on my EMI payments despite ICICI’s every effort to harrass me, ICICI resorted in tampering my EMI cheque, so that the cheque is forced to be returned by my banker. ICICI refused to return me the tampered cheque, which would have landed them in major legal trouble.
Based on my own experience with ICICI, here are my observations on ICICI’s monopolistic, unfair, unethical and restrictive trade practices:
1. ICICI lures home loan customers of other banks to balance-transfer loans from their existing banks/HFCs with lower ROI (and promising freebies) under a particular reference “Prime Lending Rate”. The same is also followed for new customers, who are promised (falsely) a lower Rate of Interest on Home loan and better service. Once they get the customer, ICICI starts arbitrarily increasing ROI/PLR, without any regards to RBI policy rates, market rates, or ROI offered to it’s own new customers. Customers who already availed loan get penalized. ROI reduction is not passed to existing customers even if the market rates fall on Floating Rate schemes.
2. ICICI uses different mechanisms (unethical and unfair) for raising, and for reducing the Interest Rate (ROI) on home loans, although the ‘PLR’ is supposed to be used as the only benchmark rate and mechanism for all ROI changes. The system is designed by ICICI in such a way, that a home loan customer is always at a disadvantage against new customers and pays increasingly higher rate of interest throughout the tenure of the loan. The ROI gap widens as time passes, and the borrowers are required to pay hefty penalties to ICICI bank on any foreclosure, part prepayment, or refinancing the loan, when they try to reduce the interest burden. ICICI, thus ensures that once they get a customer, it is locked with them throughout.
3. ICICI introduces new benchmark lending rate PLR (with a different name, although serving the same purpose, for the same product) again to lure and misguide new customers. ICICI has multiple PLRs for same product/service, which is not permitted as per RBI guidelines. New PLRs are introduce to get new customers at lower net effective ROIs (by using lower PLR and lower ‘spread’ or ‘margin’), and all the PLRs are increased in tandem over time. Thus, borrowers are required to increasingly higher net ROI over time, irrespective of market rates.
4. ICICI promises freebies (in writing, in advertisements) e.g. free personal insurance cover, free property insurance etc, however once the loan is availed, no insurance is provided, neither any policy is sent to the customers.
5. ICICI charges hefty penalties for loan foreclosure, prepayments etc. when the customer wants to prepay or close the loan due to high ROI. ICICI also charges the existing customers heavy fees for re-financing from other banks when the customer finds that the ROI charged by other banks are much lower than they are paying to ICICI. This is done despite giving in writing (sanction letter terms) that there will be zero prepayment and foreclosure penalty. No ‘foreclosure statement’ is provided as proof, which can allow any customer to file any complaints anywhere. Foreclosure statements are issued only when the customer presents a cheque for foreclosure (balance principal + interest + foreclosure penalties + other applicable charges)
6. ICICI forces customers to pay ‘switch fees’ for reduction in ROI to market levels on Floating Rate Loans, although Floating rate loans are supposed to have reduction in ROI when the RBI policy rates, or markets interest rates fall. ICICI does not provide any satisfactory answer on what the customer is switching from (floating rate product to same floating rate product, not to fixed rate product or reverse etc!). ICICI enforces one sided amendments in loan agreement during any requests for reducing ROI (slightly, does not synchronize to market rates still), and forces customers to submit a signed stamp duty paid agreement with all fields (amounts, ROI etc) kept blank. However ICICI increases the ROI arbitrarily without any fees or agreement from customers.
7. ICICI presents (for clearance) post-dated EMI cheques late with clearing house, and charges penalty on customers for ICICI’s own delay, despite that the customers have submitted all the EMI PDCs with ICICI in advance, and that customer accounts have sufficient balance.
8. No quarterly/annual account statements are sent to the customers, although the admin fee is charged in advance by ICICI. ICICI also refuses to accept post dated cheques during the last year of loan, although no ICICI document provided to customer says so. In fact, the customer is requested for PDCs through a letter, however, when the customer deposits the PDCs, ICICI refuses to accept the PDCs, and customer has to visit the branch every month to deposit EMIs. This is plain harassment.
9. ICICI charges interest even without disbursing the loan. The interest is charged from loan sanction date, or loan agreement date, and not from actual disbursement of loan. Another unfair practice.
10. ICICI refuses to provide any useful information (including account balance, interest paid, foreclosure statements, balance-transfer procedures etc) on request to customer-care contact center, and forces customers to visit the branch. ICICI forces customer to pay charges for any account statements collected at the branch, which they claim that these are not chargeable when requested through contact center (on which they had refused to provide any info). Despite that they are supposed to provide escalation contacts and internal escalations should work (as per the Banking Code of Conduct circulated to it’s customers), the same is not followed by the Bank. No escalation within the bank, even upto the Managing Director levels work.
11. ICICI puts undocumented conditions such as part-prepayment to be done for change in EMI, arbitrary amount for minimum part-prepayment, puts limits on number of times part-prepayments can be made during loan tenure or calendar and financial year, and keeps these changing without customer consent or informing them. Since such things are not informed to the customer, customers find it very painful when they go for prepayments, and are turned back without accepting the prepayments or change in EMI stating arbitrary rules as above, which the customer is not prepared to pay on the spot. This is not only inconvenience to the customers, but customer is forced to keep paying higher interest due to such delays.
ICICI also charges undocumented fees/conditions under different heads exploiting grey areas - e.g. for swapping cheques fees when EMI is changed, switchover fees from floating to floating ROI within same product, and also from one product to another new product, part-prepayment and foreclosure penalties which are not initially informed/documented, ‘documentation fees’ for prepayment.
12. ICICI hides several facts from the customers.
Several verbal promises made by agents (e.g. doorstep service, processing and disbursal on/before a promised date, simple documentation, single point of contact etc), however, the borrower finds that none of these promises are honored once the loan is availed.
13. ICICI doesn’t even bother to reply to the complaints filed repeatedly, in person with their branch/head offices. In some cases, however, they will send irrelevant communication (e.g. arithmetic equation ROI=PLR+Margin, or an ‘request’ to visit their branch office again for clarification), without showing even an intent to resolve the complaint. No escalation contacts are provided, which is against their own published Ethics code. This is also deficiency in service.
Please be extra cautious while borrowing from this bank, or just avoid it altogether if you can.
February 15th, 2008
Categories: Consumer Cases, ICICI Bank, Law . Author: Ankur Raheja . Comments: 1 Comment
