Jagoinvestor
April 19, 2012
How Axis Bank fooled a Home Loan Customer – Real life Case
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 ?
The worst bank to bank with is Axis bank.
Filled with cheaters starting from their agents, to the bank managers ALL….
I applied for a home loan of 1cr, I was promised to waive off the PF and ROI of 7.2%
Received a sanction letter of 8.2% ROI, PF of a f***** 1.18Lakhs, Insurance which I did not wanted…etc etc etc
They consumed more than 2 months of my time already and then present me this ****…..
I cancelled and applied with other bank, which cleared my lan in just 10 days
Never Ever banking with Axis Bank (Choro ki bank)
Thanks for sharing your case with all of us
I too facing the problem as withouy proper intimation increasing interest rate on home loan like they wish… when called customer care they say they will consider request and fooling me as customer not reachable hence closed the request.i took top up loan they mentioned same interest rates apply as hone loan but current interest rate is 9.20 on home loan and 9.95 on top up nearly equals to personal loan, is there a way i can complain it to RBI, i have all call recordings of their terms and conditions before taking top up. I requested to close top up, they told 3÷ for pre closure. I determined to fight and viral my case. Also AEPS fraudlent transaction happend on my savings account and they repay the money after investigation aftet lot of follow up but noy sharing details. My suspicion is bank intetnal people are doing this type of frauds. I have not shared my Aadhar details to them for this kind of transaction and some how tfraudsters used my bio metrics to complete the transaction without OTP that too online. Transaction max limit is 10k luckily their 2nd transaction fails as no money in the account.
Axis bank is number one cheater, they are looting customer money for getting commission from Tata AIG property insurance
Thanks for your comment Raj Kumar
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
Tell them you will complain about this to RBI and get them sacked. This is illegal . Read this http://jagoinvestor.dev.diginnovators.site/2012/12/forced-selling-with-home-loan.html
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?
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
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
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
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.
you can file a complaint with regulator that RBI & IRDA
Complain about this to Insurance Ombudsman
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.
You need to check this with banking ombudsman !
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.
I think only bank can decide on this .
Thanks ,but I wanted advice about probable legal action.
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.
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
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?
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
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-mis-selling-of-insurance-policy-437861.asp#.VqNl6lJK7d1 .
here it is mentioned that before selling sbi life one have to show the brochures, specification of the projects and same not happened with me and also before disbursement of first premium branch manager even not informed me they have only two docs one is agreement and another is policy form in which they have take sign by fraud
>> Forced selling and Mis selling is not allowed. It is offence.
For reasons best known to the regulators, litigants, lawyers of the litigants and accused, and court of law…………………..the offenders are not being put behind bars in correctional centers. Usually the offenders are let off with simple monetary penalties.
Thereafter the offenders indulge in same unfair practices AND REMAIN UNDETERRED.
IRDA, consumer forms have levied huge and heavy penalties a number of times on M/s ICICI…………………and the decisions are available on the website of IRDA…………………..and
Confonet
confonet.nic.in/
>> It is neither mandatory nor can be enforced that the borrower has to buy life insurance from the lender or any of its associate or any insurance company with which it has a tie up.
It is not mandatory that borrower has to buy insurance on the spot and has to assign the policy on the spot…………………..
Majority of the banking practices are not necessarily law of the land, are not in line with law of the land, sense and prudence too.
Many of the banking practices are unfair and that is why Banks and bankers are penalized.
>> You may provide a few pertinent and prudent information’s to your lawyer:
1. Did the Bank, Banker provide the authenticated copies on the spot or later, of all documents put up before you to sign?
2. Did the Bank, Banker ever provide the delivery of original insurance policy along with copy of the proposal form signed by you?
3. Did the Bank, Banker obtained signature on assignment deed even before the policy bond was ever supplied to you?
Did the bank, banker, insurance company ever provide the policy brochure, PQIS, illustration, of the policy to you?
3. Did the bank, Banker executed the assignment deed without supplying the original policy bond to you?
4. Does the documents signed by you contain any clause that the bank, banker, insurance company is being authorized not to supply the policy bond and execute the assignment even without supplying the original policy bond to borrower?
5. Is it legal, lawful, fair, reasonable, justified that until or unless the instrument which is to be assigned has not reached the hands of assignee or has not been even seen by assignee but gets assigned?
The act of the bank, banker is clear offence?
6. Is the insurance company empowered by any law of the land to supply the insurance policy to any one other than life insured?
If not under which law or power or authority the insurance company has chosen to supply the insurance policy to some one else?
7. Did the bank and banker obtain your signatures on any document that insurance policy be not supplied to you but may be supplied to bank or banker and be assigned on the strength of this document that was signed by you ( along with proposal form on the day proposal form was signed by you) i.e.
days before the proposal from was even scrutinized by the staff of the insurance company, underwriting was done by insurance company, and policy was inforced by the insurance company, policy was issued and policy schedule/bond was even printed and dispatched??????????????????????????????
Until the insurance is underwritten or approved by underwriters it can not be issued even by the MD of insurance company.
Does IRDA, Ministry of Finance permit to assign an insurance policy even before it is issued???????????????????
Has any court of law delivered any decision and judgment that such a conduct is permissible?
IT IS CLEAR THAT SINCE BANK, BANKER ARE CROSS SELLING THIS INSURANCE POLICY THEY ARE WELL VERSED WITH THE FEATURES OF THIS POLICY WHILE THE BORROWER IS NOT.
THEREFORE THE BANK AND BANKER ARE WITHOUT ANY HESITATION CROSS SELLING OR RIGHTLY SAID FORCE SELLING THIS INSURANCE POLICY.
8. The Bank/Banker/Insurance Company has issued and supplied a SMS to you on dated 28/11/2013 STATING POLICY NO AND POLICY NAME…………………………… I HAVE NOT RECEIVED ANY POLICY KIT TILL NOW.
>> THE FREE LOOK PERIOD SHALL START FROM DAY/DATE OF DELIVERY OF THE POLICY…………..AND NOT FROM DAY/DATE OF COMMENCEMENT OF POLICY!!!!!
Did you write to M/s ICICI PRU to supply you the certified copy of the POD and document signed by you on the strength of whom it has chosen not to dispatch the policy to you but to someone else?
Did you declare in proposal form any other address other than your address for delivery of the policy?
Remember ICICI PRU is under obligation to comply with KYC norms and can dispatch at your address for which you have provided copy of address proof and original of which is seen by authorized representative of the insurance company and this authorized representative is to mark ‘OSV” on copy of address proof/KYC documents.
You must demand in writing from Bank. banker, BM that he should declare in writing in the form of numbered list on letterhead under seal and signature by hand, which documents they place before you to sign and obtained your signatures and authenticated copies of the same be supplied as per numbered list by registered post only so as to reach you in say……………..3 days.
You may write to M/s ICICI PRU that you have receive a SMS reading as……………………..on dated………………….from their phone number…………………….at your phone number……………………but you have neither received the original policy document nor POD, till date despite representations made to them and you were constrained to look for alternatives as neither the policy brochure or details or PQIS or illustration was ever shown to you/provided to you and at your own cost you had travel to the cyber café and check the details of policy name……………………..on website of ICICI PRU and you are not at all convinced with the policy and has decided to cancel the policy as already informed by you and policy stands cancelled.
You may declare otherwise also since policy is not supplied to you the free look period has never ended and you are within your rights and you are canceling the policy without any prejudice to your rights.
You may declare that now onwards bank, banker, insurance company shall supply all communications in writing by letter
on letterhead under seal and signature by hand thru registered post only and if the bank, banker, insurance company affirms in writing you are willing to supply the postage prepaid, self addressed envelopes it wants.
>> Let the bank M/s ICICI , banker, M/s ICICI PRU reply to you in writing or maintain a studied silence.
Instead of lodging a complaint to Grievance Redressal call center of IRDA you may lodge a complaint addressed to the Chairman of IRDA by letter thru fax followed by redg. post and demand that hearing be conducted by IRDA at your city or thru video conference.
>> You may also lodge a complaint with Non banking Cel of RBI with a copy to Governor……………….
Smt. Uma Subramaniam
Chief General Manager -in-Charge
Department of Non-Banking Supervision
Central Office
Centre I, World Trade Centre, Cuffe Parade
Mumbai-400 005.
Phone: 022-22153350
Email id: [email protected]
Governor
Reserve Bank of India
Central Office Building
18th Floor, Shahid Bhagat Singh Road
Mumbai-400 001.
022-22660868
[email protected]
Hi Manish
I have applied for home loan of Rs. 1600000 to SBI. On the date of documentation I came to know that loan amount is Rs.1690320 and Rs.90320 is home loan insurance. documentation done. But loan has not been disbursed. Now I do not want to take loan insurance cover. what should I do.
Hi Kaushik
Read this – http://jagoinvestor.dev.diginnovators.site/2012/12/forced-selling-with-home-loan.html
Dear kaushik,
same thing happened with me wrote to chairman sbi on email action will tak eimmediately
I approached Axis Bank for loan against purchase of flat(re sale) Please inform, how the Axis Bank arrives Value of flat before sanctioning loan. They have taken all the documents and given sanction letter for 27 lacs as per required by me and they collected process fee of 6500/- same was debited to my account, now they are saying that they can not give 27 lacs and can give 24 lacs only. Before giving all the documents and processing fee, I checked with Bank official, 2/3 times, the amount I can get as loan, and after asking him only, I arranged sale agreement for 21 lacs.
Kindly help in this regard.
Hi D Srinivas
This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that
Manish
I have applied a loan in DHFL for 32 Lac, out of that they sanction 31.50, Now they are saying for Insurance for tax saving which I not at all required due to badly financial condition. now they are saying its difficult to disbursement of ur amount to builder if u will not do the insurance.
Its a simple life insurance nothing else. I don’t need that,Please do suggest me. I am trouble and have to reply back them by today itself.
If I will deny what will be the consequences?
Please let me know
Regards:
JAY.
They are just trying to scare you and nothing else.
Tell them that you will not take it and you know of the IRDA directions on this . Show them the following article – http://jagoinvestor.dev.diginnovators.site/2012/12/forced-selling-with-home-loan.html
Dear Manish,
I had taken a home loan from ICICI bank and had a clause in my pre-sanction letter mentioning that I need to close my CC payment of XX amount before 2nd disbursal. The bank I made the initial and 1st disbursal based on slab completion to builder. Now I have received another demand from the builder on completion of final slab for which another disbursal has to be made by the bank. I have made payment of more than 50% of the total outstanding cc bill. But the bank is asking me to send them a closure proof based on the condition in the sanction letter for further disbursal. How do I approach the bank that I have made more than 50% and request them to disburse the demand amount as I will be charged late charges. Also how should I write a few lines to them.
Appreciate your help as I wouldn’t be able to finish the balance cc payment immediately. An advice and few lines that can put in my email would help.
I dont think bank will give you any disbursement if you dont pay off the full amount. If its part of agreement you have to follow it , else agreement is null and void !
I requested for a home loan in dhfl.They sanctioned the loan for 18 years.intially i was said to be sanctioned for 10 years.they also included 57000rs insurance amount without telling me.I dont wantto pay that much amount for insurance .KIndly Suggest
Complain to banking ombudsman on this
I have applied for home loan at Axis Bank in March 2015. I have submitted the entire document as requested by the branch. Without verifying any documents or any communication with me they issue me a sanction letter and deposited my Processing fee cheque and thereafter there was no communication from bank. On sanction letter it was mentioned as under construction building as a purpose of loan but I have submitted the agreement copy of the house which I was supposed to purchase. When I asked about the same they told me that we mentioned anything on the sanction letter and we can modify it as per our convenient. To the surprised there was no communication from bank till 4 months after I escalated the issue the person from branch called me and said why did u put an escalation email and was very rude in talking. The customer care of axis bank admitted that it was their fault they follow the procedure for sanctioning home loan we will refund the amount of processing fee charged to you. Suddenly today they refuse it’s not in our policy once its credited into our account we cannot refund it even though it’s our mistake.
Hi Dhaval
You should be meet the branch manager of the policy and escalate .
I am BALAMURUGAN.A.M my HDFC LOAN APPROVAL .Actually my builder intimated me to release the second phase of the loan amount.The mean time my registration get scheduled on 12.3.2015. At that time i met the HDFC representative and enquired him about the second phase of the loan amount and he told me to ask the photos from the builder and only if enough work is done we will release the amount likewise he told me on that day. More over he informed me to to send a mail after verify the photos to release the second level of payment.The photos i received from the builder side only on 16.03.2015. But after that i was unfortunately hospitalized from 17-03-2015 to 28-03-2015.When i returned back to home from hospital on 28-03-2015 i got a courier stating that my second phase of the loan amount has been released on 17.03.2015 at 4:00 p.m.But i dint get any intimation regarding this and no acknowledgement has been given from my side before i receive this courier.Then i asked them to give me a proper explanation from banker side that how is this possible without getting my permission the payment can be released to the builder.Regarding this i called and enquied through customer care. Regarding this issue i dint get any proper response from the banker side. What is the solution for this problem? If legal action is to be taken what could be done??
Hi balamurugan
Your cases is a bit complex and I think we are not the right people to comment on it.
My suggestion would be hire someone who is professional in this area and consult them
Manish
Hi , i need little advice about home loan. We are getting loan of 49.5 lakhs from SBI and interest rate would be 10.15%. But we need loan of 52.5 lakhs which axis is ready to provide. But i heard that one should take loan from nationalised banks only as private banks have hidden charges in long term. I very confused what to do . Can anyone tell me about axis bank experience. Do they charge u later somehow? Is SBI is better option?
SBI is a better option I would say for such a big amount ..
My question is related to Home Loan agreement between me and bank.
I have purchased an apartment, home loan is sanctioned and sale agreement is also been registered by Sub-Registrar between me an builder.
Now to disburse the loan from Bank, I need to sign an agreement with bank, which I asked that this agreement should also be registered by Sub-Registrar too, but bank is insisting on Notarized agreement including stamp duty.
As now all agreements’ index 2 are available online on maharashtra govt websites, so I think its proves more reliability and increases trust factor
Shall I proceed with Notarized agreement with HDFC ?
Dheeraj
Hi Dheeraj
The question asked by you is beyond our scope. Its suggested that you hire an expert on the issue and pay them for the advice.
Manish
Is property mandatory for disbursement of Home Loan?
My home loan has already been sanctioned. I have done the necessary documentation, but I am being forced to opt for a property insurance. Only then the disbursement shall be made.
Should I give in?
Hi Komal
Its just a sales trick . Read this – http://jagoinvestor.dev.diginnovators.site/2012/12/forced-selling-with-home-loan.html
Manish