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 ?