How Axis Bank fooled a Home Loan Customer – Real life Case

POSTED BY Jagoinvestor ON April 19, 2012 COMMENTS (277)

This post is to bring to you notice how banks can get you in trouble while signing the home loan documents and use your casualness and trust to force-sell you some junk product. Recently one of our readers Nitin Mittal took a home loan from Axis Bank after a lot of research and study, but Axis Bank officials sold him a home loan insurance without his notice and issues him loan of extra 4.25 lacs along with Max New York life Insurance company. Read his story in his own words

I applied for a home loan to Axis Bank, Ghaziabad Branch considering good interest rates and transparency. The property was Amrapali Heart Beat City-I, Sector-107, Noida and I was sanctioned a loan of Rs 45 lacs. In this duration 100s of papers were signed by me telling me that these are all formalities and are needed.

However when the first disbursement was made then I came to know that the total sanctioned amount is Rs. 49.25 lacs. When I enquired I was told that the balance 4.25 lacs is the amount of insurance policy that the bank has paid to the Max New York company for a full cover of 49 lacs for me and my wife for a full tenure of 25 years in single shot.
This was never told to me clearly and I cannot bear such a loss. The purpose of bank was to earn unlawful commission from insurance agency at our cost. Also the cost of insurance is much higher than the prevailing market rates. I and my family feels cheated by this unscrupulous activity and seek you help to save our hard earned money.
As nobody in the bank replies properly and only assures that the insurance will be returned if loan is prepaid . this is only a way of fooling customers. The bank has not only disbursed 4.25 wrongly but also charging interest on the same.

It is, therefore, requested kindly do something in this matter so that my loan amount is reduced back to 45 lakhs. Also please the interest charged on this insurance amount should also be waived off.

Home Loan Customer and Mistake of Axis Bank

The fact that the customer came to know about the home loan insurance after the loan was sanctioned clearly shows that Axis Bank operations was not transparent at all and the customer was taken for granted. How can you sell him a home loan insurance without even telling him? This has to be communicated well? Was there a person one to one communication done with the customer if he can afford it or not ? A normal term plan with 50 lacs cover with 25 years tenure will cost less than 1 lac , but a policy worth 4.25 lacs was issues and no one even cared to understand it from customer point of view. This clearly shows the in-sensitiveness of the bank officials involved in the whole process.

What do you suggest in this case? What can this customer do and what do you think about Axis bank ? Will you ever consider Axis bank for Home loan after hearing about this case ?

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277 replies on this article “How Axis Bank fooled a Home Loan Customer – Real life Case”

  1. Raj Kumar says:

    Axis bank is number one cheater, they are looting customer money for getting commission from Tata AIG property insurance

    1. Thanks for your comment Raj Kumar

  2. Swapnil says:

    Hi Sir This is Swapnil Bagkar ,i have got Axis bank home loan and when i got demand letter from builder to give last disbursement amount then Axis bank told me to buy home insurance ,then we realease last disburdment amount ,i am totoly confused ,wht should i do

    1. Tell them you will complain about this to RBI and get them sacked. This is illegal . Read this https://www.jagoinvestor.com/2012/12/forced-selling-with-home-loan.html

  3. Nitin Rustagi says:

    Hello Manish,

    I have applied for a home loan in Axis Bank. In 5 days, they sent me a message that my loan of 28 lacs have been sanctioned. After that they did technical verification and all the proceedings that should have been done before sanctioning the loan. Moreover i didn’t receive any sanction letter. They deducted a processing fee of Rs5750/- beforehand..
    After some days, they told me that your loan cannot be approved. When i ask them to return the processing fee to me as this could only be deducted if loan would have been disbursed to me, They said it cannot be reversed.

    I am feeling like cheated. Please guide me what to do?

    1. But Nitin

      This is how it happens, Processing charges upto one amount are not given back because its charged for the processing. The work they do before loan sanctioning is called processing . That work has anyways happened even if you didnt get the sanction. So its an industry norm.

      Manish

  4. kamal says:

    Sir I have borrowed loan of Rs 606000 from Bajaj Finserve but they disbursed only 588765 rs as they deducted 11235 for processing fees so total disbursement including processing fee is 600000 , and 6000 balance amount is not disbursed till date but I m paying interest for full ammount …one more point is that my EMI should be 14496 but they are charging 14497 from me…can u Pl suggest me what can I do to reciecve my balance amount…thanks in anticipation

    1. Hi kamal

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  5. Aarti says:

    My home loan is sanctioned but not yet disburse. Sanction letter was having a condition as “Insurance as recommended” now based on this condition they are forcing us to take a term insurance by them (just because they will get commission) and hence not allowing us to take same term insurance by outside. Insurance offered by them is almost double the cost with less cover.

    1. Deepak says:

      you can file a complaint with regulator that RBI & IRDA

    2. Complain about this to Insurance Ombudsman

  6. SunilKamble says:

    Hi we have taken a home from DHFL in the year 2009, my father was the maun applicant and me the co-applicant in that, they provider a policy of nearly 30000 of SBI bank, my father passed away in 2013 when we approched DHFL they are provideing the policy people number and telling the policy was lapsed due to some signature was not available and that amount we have deducted from the prinicple amount. We haven’t rcvd any mail of policy lapsed, Please healp in the further action case.

    1. You need to check this with banking ombudsman !

  7. Raman says:

    Axis Bank sanctioned me a home loan ,deducted the processing fee from my account and got signed the agreement after taking 1700 in cash as stamping charges additional. After all this, they asked me to submit photo copy of bank pass book of seller and his bank statement of last six month. The seller refused to give these documents saying that he is not having the same rather he gave photo copy of his cheque.But bank refused to disburse the loan amount. Bank is not refunding the PF and stamping charges. Kindly guide all possible action in this matter which can be taken by me. Thanks.
    R.B.Saraswat, Jodhpur.

    1. I think only bank can decide on this .

      1. raman says:

        Thanks ,but I wanted advice about probable legal action.

  8. samson says:

    My sister and brother in law had taken a housing loan from AXIS bank, in the year 2011, and in that the first name is of my sister and second name appears of my brother in law. The loan amount is Rs. 24,69816/- out of which $s. 4 lakh was pre Emi paid to the bank and Rs. 69816/- was toward the insurance for my sister from Max life insurance.
    On 14th of last month my brother in law expired,leaving behind his wife / and two daughters. Now when I approached the bank to enquire the status, they told me that my brother in law was not insured, hence sister will have to pay the balance EMI. Here my sister does not have a job. what should be done on this case please advise.
    When applying for loan the bank staff did not insure the second applicant [ brother in law ] which i think is their fault and now they are trying to wash off their hands by simply telling us that the balance EMI cannot be covered by insurance. This is really a dirty trick played by the bank staff here in navi mumbai. Please advise me on this.

    1. Hi Samson

      Bank is not fault here . Please try to think rationally. Its not bank job to insure people. Its the job of policy taker. Why do you say it was bank job to insure the policy holder ?

      Manish

  9. KetanShrivastava says:

    Be Aware before Taking Loan from SBI or other Bank, I am wHome Loan Customer and Mistake of SBI Bank
    The fact that the customer came to know about the home loan insurance after the loan was sanctioned clearly shows that SBI Bank operations was not transparent at all and the customer was taken for granted. How can you sell him home loan insurance without even telling him? This has to be communicated well? Was there a person one to one communication done with the customer if he can afford it or not? A normal term plan with 18 lacs cover with 17 years tenure will cost less than 1 lac, but a policy worth 2.11 lacs was issues and no one even cared to understand it from customer point of view. This clearly shows the in-sensitiveness of the bank officials involved in the whole process.
    What do you suggest in this case? What can this customer do and what do you think about sbi bank? Will you ever consider sbi bank for Home loan after hearing about this case?

    1. Hi Ketan

      Yes, there is a misselling in this case, one can approach banking ombudsman, but the challenge would be to prove that customer didnt knew about the loan insurance

      Manish

      1. ketanshrivastava says:

        SIR,
        Firstly I want to thanks jagoinvestor forum and you also because of only this firm and you I got knowledge and I took immediate action sir for proving that I did not knew about the loan insurance I am giving one of the reference http://www.lawyersclubindia.com/experts/Forced-and-m