ICICI Bank Complaints
Hi Friends,
ICICI Bank has grown very rapidly over the past few years. Against the industry growing at around 15-18%, it has grown by over 30%. The number of customers over the years also have grown over the years to millions. Sometimes, the services offered are not upto the mark and hence as customers you have every right to ensure that you are heard. Hope you will use my blog to highligth the issues faced by you as customers of ICICI Bank. I know for sure that the Bank has very good intentions of streamlining the customer service and I think they would definately respond to the issues/feedback given by you.
ICICI Bank has grown very rapidly over the past few years. Against the industry growing at around 15-18%, it has grown by over 30%. The number of customers over the years also have grown over the years to millions. Sometimes, the services offered are not upto the mark and hence as customers you have every right to ensure that you are heard. Hope you will use my blog to highligth the issues faced by you as customers of ICICI Bank. I know for sure that the Bank has very good intentions of streamlining the customer service and I think they would definately respond to the issues/feedback given by you.
1 comment:
ICICI Bank's Monopolistic, Restrictive, Unethical, and Unfair Business Practices
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.
- Parag
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