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POSTED BY ON April 19, 2012 COMMENTS (280)
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.
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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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: cgmicdnbsco@rbi.org.in
Governor
Reserve Bank of India
Central Office Building
18th Floor, Shahid Bhagat Singh Road
Mumbai-400 001.
022-22660868
governor@rbi.org.in
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
Even whn I took a Mortgage loan 2 years back, I was told by Executive that Life insurance is mandatory but when I recd Sanction letter which clearly indicated that it is only optional. Then I sent lots of emails with regular followups and escalated to top nodal officers level. Then finally after one year axis bank waived off that insurance amount and also waiver of the relevant interest component(for one year). Hence I request all the people to take any unsolved problems to top level(emails id’s are mentioned in the bank website itself) so that we will get some justice. I found out that the knowledge level right from the lower level executives to Branch managers is very less in axis bank and hence please visit website and also get any clarifications thru emails before taking any loans.
Thanks for sharing that experience with all of us Sajeesh . It helps !
Hi,
I had a similar experience with ICICI bank. I have approached ICICI bank for a site (plot) loan. I have submitted my loan application with a processing fees in cheque. In my initial discussion with the ICICI bank professional and his manager, they said, the layout which I am applying for loan is already approved by the ICICI bank. All the problems started after applying for loan.
ICICI bank professional insisted me to buy an insurance policy (around 50 thousand) before approval of the loan. I already have 2 insurance policies in which one insurance policy from ICICI itself. They still insisted me to buy insurance policy to get the loan approved. I denied it but I still confirmed I will buy insurance only after the sanction of the insurance policy towards my loan.
Later ICICI bank did not come back and just debited my cheque (processing fees). I contacted ICICI professional and the manager to know the progress. I got the reply saying the property which I am looking for is not approved.
It looks like ICICI bank is not interested to lend me a loan on a property but tried to cheat to sell their insurance policy and charged me the processing fees.
Please do not buy insurance policy for the sake of loan approval. Also, prefer the pre-approved banks rather than other banks because they may not be interested in loan but vested interest in selling other products.
Thanks for sharing that experience !
icici bank have sanctioned me home loan amount of rs. 2608150/- out of which disbursement amount/ cumulative disbursement amount/ cheque amount is rs. 2521630/-. but the cheque amount is actually rs. 2500000/-. loan officer says that rs. 108150/- above rs. 2500000/- is an amount of insurance policy which has been paid by the icici bank to icici prudential (an insurance co. of icici). answer is not satisfactory. pls advise me. i have time to rethink before sunset today. so pls advise..
You have been missold . Better complain to IRDA on this and you will get back your money
please read my name Hari Parkash Singhal
They should e called BANKSTERS rather than BANKERS who cheat through innovation on innocent customers.
However smart you are, they knows different way to cheat you.
So always go for loan which has been experienced by your friends/colleagues and relatives… probably through same agent….
Thanks for sharing that point, yes it makes a lot of sense to go with an agent who is already tested !
Please anyone can help me below the issue
I had applied a home loan (for plot purchase) in the axis bank they sanctioned 14 lacs now they are giving only 10 lacs they telling a story ,(as per our agreement 21 lacs accordingly they sanctioned 14 lacs)now the bank tech lead is assumed the total value is 13.5 lacs so we can give 10 lacs olny(around 75% of the tech lead value) like that and also they are forcing to us the insurance is must like that and if we agreed the insurance then only they will process the loan like that
In my case please let me know
how they reduce the market value
and is it mantotory theinsurance for plot purchase
Regards
GANESH
Hi Ganesh
Insurance is not mandatory , they are just trying to build pressure on you to sell you the policy . Read this article – http://jagoinvestor.dev.diginnovators.site/2012/12/forced-selling-with-home-loan.html
It was very informative guys. Applied for home loan to Axis Bank (less option because this project is approved by Axis only) as it is a new project as of now. Part / Full prepayment with NILL charges is of course so attractive so going ahead with the same.
Filled in the application form & while filling itself told clearly that I don’t want any insurance with this home loan.
Now problem is, I do not have any insurance for me as of now. So could you pls clarify if they agree without insurance?
Thnx
I had a similar experience with Kotak Life Insurance. The insurance agent was smart enough to gain my trust. He did all the paperwork and i signed trusting him.
This was 5 yrs back when i was naive and did not understand much. Much to my surprise later, i realized that in case i close it earlier i will not get the 1st yrs insurance premium.
Later on, i see this happening everywhere with a lot of my friends and that was the same opinion they had abt my experience (that its very common, and it was my mistake).
This really broke my trust towards all portrayed loan details, agents, etc.
That’s how i learnt my lesson which I will never forget, thanks to that experience and now I scrutinize everything very minutely before signing.
hmm .. I know these kind of experience happen, but I would like to suggest that dont paint all agents with same color . I personally have got a great agent recently ! … I know one experience shapes our whole thinking towards a community , but you will agree thats not a right thing 🙂 .
Just be cautious when you deal with someone next time, but please be open also 🙂
Manish
The Plight may not end here. If you look at Axis Bank’s housing loan statement of account, you will be surprised the way it is printed. They would have just indicate the dates and cheque no. in couple of columns, and would indicate the same EMI amount as debit and credit. This is very confusing. You can never understand, how much of your EMI has gone for interest and how much for principal. You also have no clue on when the interest rate was changed and what the impact on the interest charged. Whereas Nationalized banks give a statement in which the principal outstanding is shown in all transaction, with interest accrued going to cover interest due and the remaining going to principal repayment. Despite my having got in touch both with RBI Banking Ombudsman as well as Axis Bank’s own Banking Ombudsman, I have not heared from them. Axis Bank may be cheating 1000s of customers, who simply assume that Bank’s honest and transparent.
Thanks for sharing this Bala ! . I am sure this will help others to take informed decision !
Hi All
I have taken a loan in 2009 for 45 lakhs and I have conciously decided to go with insurance and 2.9 lakhs was added to my loan. During this time I was told the insurance loan will get automatically closed when the home loan gets closed. 2 months back I went to the RAC in Bangalore and told them my intent to close the loan. I was told if I have to pre-close the home loan I will have to close the insurance loan during the same time and then they will re-fund the balance amount. Obvious reasons I did not chose this option. RAC Bangalore told me the other option is to make part payment of upto 85% and balance amount can be closed using normal EMIs to which I agreed and paid 85% of the outstanding balance. Upon completion of the balance EMIs (2 months) I went to RAC and requested for closure of the loan and requested for documents. I have received the documents and a confirmation that the home loan is closed. Today I called up the customer support to check the insurance loan is closed automatically, but to my shock they have told me they haven’t received any request to close it and ECS clearance will be sent for rest of the term (some 300+ EMIs). This is pure cheating.. Initially I was told the insurance loan will be closed automatically and even when I went to the RAC for closure of my account they maintained the same.. I am going to ask my bank to stop the ECS with immediate effect.
DO NOT TAKE LOAN FROM AXIS BANK IF YOU HAVE ANY OPTION.. EVERY TIME I GO TO THEIR RAC BANGALORE I SEE SOMEONE OR THE OTHER YELLING AT THE STAFF THERE!!!!!!!
Hi Murali
Was this given in writing ?
They never give anything in writing. The discussion happens across the table Manish.
Then you should never move ahead if you do not trust them .. The problem is most of the people do not pursue it long enough and are not ready to take the pain of approaching consumer court and banking ombudsman . What do you think ?
sir,
i recently had taken a home loan with sbi..it is for 29lakhs for 25 yrs tenure. 2 weeks back i noticed that sbi added a home insurance cover to it and charged a premium of 24k to my home loan acct without any intimation to me..the insurance is in my name and the coinsurance detail says Own share -100%…will i be able to cancel it directly without the need of NOC or approval from SBI RAPC center. ..i only place where it says SBI RAPC is – in intermediary contact and Name of financial institution..will this construe as any sort of hypothecation or is SBI RAPC acting just as a agent in this case.
MOstly you signed some papers without checking ! . Please contact SBI and ask to cancel – read this – http://jagoinvestor.dev.diginnovators.site/2012/12/forced-selling-with-home-loan.html
I have also been fooled similarly by PNB. The insurance is not compulsory as bank attaches property papers along with it.
But still bank charged me for insurance so in the EMI of 30,000 Rs. 1326 is for insurance.
This is how India and Indian banks work and RBI claims transparency and better governance etc.
Hopeless i would say.
Thanks for sharing that Sonal , when they took your sign, why didnt you ask them about it . I hope you must have checked each paper you signed.
I gone all the comments and they are informative. And here is one more example of axis bank. I took home loan of 3365000 as usual bank policy they ask me if I have insurance I said no they ask me take insurance. Guy was very friendly he told me that in case some thing happen to me bank will take care of money bala bala and gave insurance of 77000 I took it. Know after 1year I was planning to transfer my home loan to SBI as interest rate are lower and they have some good scheme as well and they ask me same thing if I would like to take insurance I said I already have one. They told me to take a letter from respective bank letter head that they will co ordinate same deal in case of SBI. I spoke to insurance fellow he told me that this policy is not transferable and it will get closed in case I am transferring bank. I said OK he told me some amount would be deducted as 1year already is passed I said OK he said it would be more then 30% and then he started giving me details. He told me that it was group policy that is been sold to me which neither Axis bank nor maxlife newyork guy told me. He said me that while giving policy they assume that I will continue to entire tenure of 20yrs…. I am sure that I can do nothing about it know as I have put faith in bank so know I have to face the consequences….It is just passing of the half information like half truth…
Thanks for sharing the experience !
Recently my father had expired. We are paying housing loan & topup loan. How could i check whether my housing loan is insured.
There is no way ! ..
Dear sir,
i applied for home loan for 20 lakhs in AXIS bank and opted only home loan options. my application was pending for a month. one day agent come and got another form signed saying that insurance is necessary but it will be small amount. when loan is sanctioned it was 52k for 19 lakhs loan amount for 20yrs.and emi included in loan amount. a property insurance was also charged of rs 8900. earlier agent told me that prop insurance will be 5000 or like.he got signed all paper in very hurry when i was about to leave for my office and could not see what paper has signed. some time i feel cheated some time feel ok that my loan is insured. what u inteligent people say pls comment. am i cheated or its ok with this insurance amount.
While its something which is for good only, you have violated a simple rule of “rushing” . Never sign something like this without understanding what is it !
I think we always have some 30 days time to cancel any insurance – read the insurance policy document carefully.
Its 15 days most of the times in life insurance
Hi,
I am planning to get home loan for a land purchase already been identified. I don’t have any plan to construct house in this land for next 5 years. Just for investment I am purchasing this land. Below are details.
Land Purchase Amount : 9 Lac. Home Loan Amount : 7 Lac (80%). Tenure : 5 Years.
1) Whether I should go for fixed or floating Rate. Also It would be helpful if anyone suggests me regarding the bank from which I should go for home loan.
2) As far as I know, SBI & HDFC are the best for Home loan. Only HDFC gives Home Loan for Land Purchase. If SBI means needs to start construction within 6 months from the 1st loan disbursement.
3) Can I claim Tax exemption for this home loan. Whether Interest / Principal consider for tax exemption?
4) When I asked for the loan in HDFC Bangalore branch, they said 10.25% interest rate and 0.5% processing fee + service-tax. But when I asked in HDFC Madurai branch (property in Madurai), they said 10.50% (since it is not housing loan, and it is land purchase there is 0.25% increase) interest rate and 1% processing fee. Is this acceptable? How come two different branches say different interest rates?
Please help me on this.
Regards,
Suresh
Suresh
This requires some ongoing discussion and should be put at our forum – http://www.jagoinvestor.com/forum/
Hi Manish,
Yesterday I registered in the forum. But it takes 48 hours to activate. So that is why put it in the comment section to get a quick reply.
Can you please post this in the forum on behalf me. If not, please send your reply to my email id.
Your login is created by now .. check your mail to see password ..
my experience with SBI HL is pathetic.
1.) they forced me to opt for SBI life insurance stating that you loan application will not be sanctioned. Though my margin in the loan was 29.3% along with CIBIL rating of 768.
2.) loan was processed with the required amount and they allocated me another amount for Life insurance.
3.) till then, no life insurance form was filled by me.
4.) In RACPC center they said that its mandatory to have a life insurance for your loan without which we will not disburse the loan.
My point was if it was so important, then you should have got the insurance first then would have processed the loan.
In reality have a life insurance is not mandatory for getting a home loan from any bank.
Please advise what can i do to take these office for a ride.
Pl note: no one is ready to provide this in writing.
Gaurav
You went ahead with it means you accepted it by force, complaining to it will not make much sense because on papers you signed now . At that time itself , you could have just rejected it and told them few things , it would have saved you .
Manish
I am also a victim of this type of event. But this time the event is occured by our loal SBI branch manager andthe brand is SBIlife. If there is any legal steps to prove the crime of that manager . so that I canget a justice.
You need to have a proof that you were cheated .
sir, most of the banks / home loans – will ASK YOU TO SIGN IN BLANK BONDS . PAPERS ONLY . Will rarely give you a copy. eg- I took car loan form ICICI for 4.5 lacs. Before signing I said I would like to read all the pages- in home – then only sign. They stared at me. After a lot of dilly dallying – allowed me to read – but said cannot copy this??????. I insisted the monthly split up etc- which is the only copy given to me. – I decided in my life time I will never go to them . Worse part is – FOR 36 months – with out a single default I COMPLETED the loan.- That was my problem .Even afte 4 years I get lot of calls for ICICI for credit card/ loan etc. They have all my personal info & sell this to any body who pays them.
I was about to fall into similar trap by another bank when i availed home loan from them. Fortunately, some had tipped me off about this practice of the bank. I asked this question on requirement to insure the property of purchase, then the agent told me that no need sir, we have already catered for it. I met the regional manager and requested him to bring about these issues upfront not just a day before handing over the loan cheque or on the day of property registration. I followed it up in writing with the head of bank. On expected lines, i did not get any response on steps taken by the bank to curb this practice.
So finally you were sold the insurance along with home loan or not ?
No. I did not buy the insurance offered by the bank which disbursed my home loan, it was a bit exorbitant and was not matching my requirements. So, i took it from other firm as per my convenience and requirement.
Thats good ..
Sir,
1. Will it be possible for you to provide the contact details of AXIS BANK high officials?
2. If the bank delay the payment of home loan i.e. does not pay within the stipulated period of one month what remedy has the person got who has applied for home loan.
3.Has anybody written against such gross injustice done by the bank?
4. What is the role of this forum?
Pankaj
You can always approach banking ombudsman or consumer court
if you have lot of patience ? time / energy & LUCK.
Hi,
I need to point out one thing. When we sign any document for any loan, one needs to check the header of every page he signs. In this case I am very sure that while getting the home loan documents signed, the sales person must have kept Max New York papaers in between and the applicant has signed on the places where he must have asked for. Had I been in his place I would have immediately asked about the Max papers in between. The trouble could have been avvoided.
Yes .. agree to that ..
This policy is followed by many banks. I have taken home loan from Axis Bank few months ago and I was saved by luck as I read the application form before signing. But while taking home loan property insurance the DSA of Axis Bank fooled me and I got an under-insured property insurance.
SBI has tie-up with guess … SBI Life…. 🙂 and it is mandatory to take a term plan from SBI Life if you are taking home loan from SBI. SBI adds the insurance premium to the loan amount. It is win-win situation for both…SBI earns interest on the premium paid and SBI Life gets a new policy.
I don’t know where and how home-loan customers can get their grievances resolved. Axis Bank is pathetic wrt to customer relations and service.
Amit
thanks for sharing that experience .. if its a term plan (a pure one) , I would say its still fine and one can go for it as it will benefit them only . The matters regarding this can be taken forward to Insurance ombudsman
the same situation was happened with me. i have had a home loan with my brothers with DCB Bank Ltd. in 2004, sanctioned on dated 05.12.2004, while purging i was never told that fix rate loan will be converted into floating ROI. i have applied only for fix ROI for the whole tenor of 10 years. the bank made a fake sanction letter of dated 04.12.2004 by forging our signatures that as per the term & condition no 11 printed overleaf ‘ the fix rate loan is sanctioned only for three years after that it will converted into floating ( the overleaf printed matter is unsigned). it was never told us and in lighting of this fake sanction letter bank increase number of EMIs. i complained to banking ombudsman, but the ombudsman was also a part of these type of banks ! the ombudsman called the DCB bank only and they shown the fake sanctioned letter and the ombudsman put my file closed without hearing me, hence i filed a suit against the DCB Bank.
it is also worthwhile to mentioned that the amount mentioned in fake & forged sanction letter is different, EMI is different, with the amount disbursed. and that clause no 11 of the fake sanctioned letter, was not mentioned in the Loan agreement
a meeting was held at A-Set house (a branch of the bank) to sort out the matter out of the court, the matter was not resolved then a officer of DCB Bank said,” there are thousands of the cases on the bank and this could be one more case like you !
I think you should pursue the case with consumer court now ..
Very simple..file a case with banking ombudsman and insurance ombudsman..also check the sign image on insurance policy documents..i am sure it’ll be fake sign…
Sir,
Can u provide me the latest interest rate and processing fee charged by different banks in India.
Pankaj
There are websites which can give you that like apnapaisa.com , ratekhoj.com
Sir,
I have gone through the alll posts and grievences described and faced by the buyers of the home loan particularly from the AXIS BANK. Kindly let me know if any remedy have been done. Whether the AXIS BANK now a days sanctioning loan without selling the insurance. As my knowledge goes even this practice is going on in Gurgaon branch.
All the banks do issue policies without insurance, just that they try to presuade you most of the times.
Two years back my brother in law had availed home loan from AXIS BANK. I saw the sanction letter where it had clearly mentioned three different sanction amount. The default option was option 3.
1) Sanction Amount as HOME LOAN –> A
2) A + premium towards HOME LOAN protection insurance –> B
3) B + premium towards HOME property insurance –> C
It is written in the letter to choose one of the option and submit the signed letter to the bank. He opted for option 1 hence no insurance policy sold to him. Here, one needs to be little vigil to look at the document carefully before signing and submiting to the bank. One needs to read the document carefully before signing off.
If the bank had clearly mentioned in the sanction letter and the client blindly signed off the letter without checking then I do not see any fault of the bank.
Manish
Thanks for sharing your case .. its true that one has to look at the documents before signing .
You can mail your query directly to top management of the company….I am sure they are much more sensible and helpful…..if the matter comes to there knowledge……you can get the resolution very fast………normally the email ID of the people in organisation is name.surname@….you can try shikha.sharma@axisbank.com….and see if you can get the reply……
Regards and hope your query is resolved
Hi,
You can try to approach Bank Ombudsman or Insurance Ombudsman and see if you get a resolution. However, you need to have a proof of all your documents, communications, etc, which can substantiate your case.
After all efforts if you dont get back your money you can try to get the surrender value if it is a ULIP. If its a term plan you cannot get back your money unless the case goes in your favor. Although taking a mortgage linked – term plan is good and beneficial, you can also take a regular term plan separately.
Next time be more careful and alert when you are signing forms. Even if you take 20-30 mins extra its worthwhile because this is a high value transaction which involves committing your life savings.
Dear Manish,
I have a small query. I have a HL with HDFC. My friends are telling that ,please change to a nationalised bank like SBI. Because for the same interest rate, the reduction of principle amount will be very low in HDFC. whereas in SBI, the reduction of principle will be higt than HDFC. Is it true?? can it happen like this..??
No This cant be true .. the maths is same for all the banks .. Who told you this and ask them for the rationale behind this ?
Thanks for info..
Try this URL with your RoI and EMI…you would know the principle….
http://www.infibeam.com/finance/LoanCalculator_input.action
This is really shocking. The borrower should immediately write to IRDA as well as to the Finance Secretary, Ministry of Finance, Government of India. Clearly telling them that their regulator is not regulating the Insurance Companies and that people of India are being taken for a ride.
This is a clear case of cheating,fraud,suppression of facts and many more things which are liable for prosecution under IPC.
Thanks for your suggestions Sanjay
http://www.moneylife.in/article/hsbc-bank-loots-a-celebrity-after-big-promises-of-24-returns/24975.html. Another case where bank duped the customer. This time a celebrity. We have to be careful while dealing with financial matter. Such stories it seems now have become common.
Yea i saw that article .. but her case is really not that strong legally 🙁
Yes even i was pushed a insurance policy by HDFC bank when i took a personal loan some 18 months back.Infact i was informed over the phone just at the time of disbursal and since i needed the loan desperately i had no option but to go ahead. This is a modus operandi followed by lot of banks. But in my case when i had gone for a home loan from TATA CAPITAL i had insisted on a insurance cover for my desired home loan but in my case they all together forgot about the insurance cover and did not give me the protection cover which was around 1.0L for a loan of 57.50L and for which i had agreed and given permission. But despite this they had not booked my insurance. So anything is possible with these Loan Companies. Now RBI has announced a cut of 50 pts but banks have implemented only 25 pts but when RBI increases then the implementation is immediate. I think RBI should take action and have this implemented across all quarters.
Thanks for sharing your case Anil ..
Sorry if this post is out of context as I did not read the earlier posts…
i had similar experience when going abroad to study. the host country visa laws mandated that I open an account in a bank of their counrty i.e. Germany for which I contacted Deutsche bank India. they said that I open an account with them, then they open one for me in Germany and then I remit money from here to that account. sounds fine. they also said that I must invest with them some money. they offered a 60 k mutual funds option. I was in a hurry and said yes. couple of days later I get a 60 k per year premium life insurance policy from birla… I am like.. WTF! im a lawyer and got in touch with birla and DB. they all said that you must have signed it. one looking at the policy document my signatures were actually there…(though I never remember signing) BUT one of the signatures was a completely forged. I contacted birla and told thema bout it. they asked for a signature specimen. I gave them via some official document. it did not match and then they cancelled…
in short my advice to the guy about whom the post was – don’t worry and don’t panic. plenty of “not going to court” ways are there… write letter to MAX, Axis, IRDA, RBI, banking ombudsman etc… it will take time but will be done. in my case the signatures not matching was a clear reason to win but might be complicated in your case.. either ways you can always go to consumer forum and they are usually sympathetic.. shot me an email if you need help (pro bono of course)
Varun
Thanks for the guidance in this case and sharing your incident, it really helps to understand how a comman man can get justice !
I have made it a practice to ask for the fine print first, read it carefully before signing anything else. This has become very important nowadays. Axis is at fault no doubt, but Nitin also escaped the responsibility of reading what he was signing.
Thanks for your comment Divyesh.. good to see you are following the document reading so well .. it will really make sure you are never missold anything
I came to know something about the way bank/agents can misuse your identity proof. Although a photo scanned copy is generally accepted as proof enough, its always advisable to countersign on the document and mention the purpose its to be used for.
Eg:
Photoidentity proof for Term Assurance from Bharati Axa
Countersign across the proof
That way agents would be able to tamper with it(i guess photoshop is still possible though!)
Yes .. we have discussed it already in one of the post
Dear Manish,
Its very common practice in every bank including PSU banks…for any house building loan, banks force u to purchase a term insurance policy….nobody from bank will tell u this during the process…for example icici pushes for icici pru , axis pushes for mnyl (previously Met life) as dey have business tie up….most interesting thing is that even if u already have an insurance policy of Rs. 50 Lakh & apply for same/less loan amount, u cant escape; u have to pay single premium.
Being a branch manager of psu insurance company, i would suggest u to prefer nationalized bank like sbi for loan purpose in future…they may nt have hi fi customer service dept but at least u would have a much better transparent process. Normally for term insurance, once single prem is paid, cant be refunded provided the cooling off period (15-30days) is over.
Hi Amit,
I had this experience even with SBI, they gave me some insurance without telling me and adding that amount to my loan amount, but the amount was quite less so I chose not to do anything further(although Manish would disagree any amount of hard money is not to be wasted 🙂 ). Plus I was getting the loan for a lesser rate under some corporate scheme.
Divyesh.
Thanks for your sharing Amit .. it will really help
Hi,
Please correct heading of the article. Axis Bank is not fooled the customer, its the Axis Bank’s loan agent who has fooled the customer.
I am an Axis Bank Home loan customer since last 10 months for new loan, I also completed 2 years Home Loan from Axis bank and I have never faced any issues with it.
Home Loan process is such that the borrower should be alert what is your agent telling you and what document you are signing. Here Nitin has signed the Insurance document and hence Bank has given insurance along with the loan.
Nitin should catch hold of the agent and should not blame the Bank. It is the duty of borrower to read the documents and ask queries on which he is signing.
I am totally happy with the Axis Banks operations its transperancy and customer service.
Yes Nilesh
I know that the officials have done it , its always like that only .. The heading wants to communicate which bank has done it , the customer has faced issue with the bank, and complained to it , but nothing has happened, so somewhere the bank has the onus for this. The quality of officals is what shows about the bank too too . What do you say ?
Manish
Dear Manish,
This is subin from chennai, now am working with HDFC and previously with SBI.
In this case I think customer was misunderstood that loan has been disbursed for 49.25 lacs, actually while sanctioning the Home loan they will sanction along with insurance premium. As per the home loan terms and condition, only the insurance premium can be debited after making the first disbursement of loan to the customer. While the first disbursement surely they will come and convience the customer for insurance and with customer acceptance only will disburse the amount to Max Newyork because this is not a small amount they have to look at it for recovery also.
And as you said for pure term plan for 50lacs with 25yrs term premium is only 1lac.. Here 4.25lacs it may be single premium with dimnishing coverage for 25years with joint borrower and this is the sanctioned amount not quoted premium, quoted premium may be lesser than this, once after the customer acceptance only quoted premium they will dispatch to maxnew york.
As he said the interest part is depend on the rate available at the time of sanctioning the loan not at the time of applying.
If at all any insurance is covered without your prior knowledge, you might have a free lookin period of 2 or 3 months in home loan coverage plans.
Without knowing real fact please don’t spoil any companies reputation by saying (How Axis Bank fooled a Home Loan Customer – Real life Case). We can’t blame a company alone, because I have seen peoples will be ok for everything till their loan sanction or till their needs fullfil and after that they blame the company. Sorry if it is hurting someone, because it is because of our careless to full fill our needs.
If u need any help on this, feel free to mail me.
Regards
Subin C B
Subin
thanks for your suggestions .. the point here is how can a person be sanctioned something without any verbal talk . In this case what if they had an agreement saying we are issuing you a ULIP for 20 lacs (single premium) and will add the premium to the loan amount and they might have added it in between the documents . The issue is the customer was not verbally informed or asked about it . He was never knowing that apart from his home loan , something else is coming along , What if his budget does not allow it . What if he can only arrange EMI for 45 lacs only and has planned all of it .
I have cc’d to the Axis bank officials and cc’d to their MD , the guy called me and said that the process has picked up the speed after this . What should be done in this case ?
Manish
Dear Manish,
As you said exactly correct, this is not only with Axis bank, with all the bank loan will be sanctioned along with the Insurance premium. While the disbursement its customer wish to continue with insurance or not and this premium they can’t put it inULIP as per bank HL guidelines, its only for approved HL coverage insurance.
The same all information will be passed to the customer with number of disbursement and EMI for the same, here 100% an employee can’t process the insurance without customer knowledge as there will be a huge difference in EMI, so he have to disclose the disbursement of insurance premium.
If its happens then bank will not encourage such peoples in the system, obviously they take action against that employee based on your complaint given to axis bank.
Regards
Subin C B
Thanks for your expert comments and guidance !
Subin,
Don’t we need to give detail of existing Life Insurance Policies whenever we take new policy? In this case if insurance policy detail was not discussed with customer then it is much likely that bank didn’t provide existing insurance policy detail to Max New York. Will the claim(I don’t wish but in case have to claim) be passed by Insurer in such situation?
http://jagoinvestor.dev.diginnovators.site/2012/04/not-disclosing-old-policies-leads-to-claim-rejection.html
You are right, we have to provide all the existing coverage details, hght, wght, nominee details etc… as i said as per my knowledge insurance is not processed here only insurance loan has been sanctioned. And I am sure that this customer has to undergo for medicals test because of 49lacs coverge… so i dont think that nothing has gone wrong.. only customer misunderstood that insurance has done without his knowlodge.
Regards
Subin C B
Dear Subin,
I think you misunderstood between Life insurance with Insurance for home mortgage (or you call it as whatever you like).
Since you home is a collateral , I don’t think, you need to undergo any medical insurance etc and nominee details are optional. No need for weight and height. Your simple signature is enough.
Even if the policy needs height, weight, with the hell lot of documents to sign, the customer may signed the document without noticing it ( I agree, we need to do it but he missed ) and agent can fill some funny details later.
Dear Karthik,
This is not a House hold insurance, this is purely life insurance to the borrowers with assignment to the bank loans, as all the information has to be provide and medicals also has to done based on the company’s medical grid.
As you said wrong information can be provided in the application by agent, but not in the case of medicals test.
It seems I assumed way beyond. Usually, for housing Loan , Banks will try to sell a insurance for Home mortgage amount. But from the above description ,it seems axis bank sold life insurance (I still doubt)
I am a Financial Advisor and would like to add that when we try to give the right advice to our client, they ignore it just because we have given them for free whereas they blindly follow what their bankers say. Even I had a very bad experience from Axis Bank. When we opened the accounts of 5 of our family members , the RM came to our house, picked up all the docs and completed the formalities , since his target must have been fulfilled but now when I go to the bank , he ignores and even doesnt recognise me . How mean these bankers are but people would still not understand untill they are fooled by their RMs.
Manish
The issue is that investors believe many people at the same time, once they have hired someone as advisor , then they should also go as per what he suggests and every one else should be secondary
I recently took a home loan from axis bank. I had received a letter from axis bank with 3 options, Option 1 – Only Home Loan, Option 2, Home Loan with Life Insurance, Option 3 – Home Loan with Life Insurance and Property Insurance. I opted for Option 1 – Home Loan Only. The bank executive tried to sell me the insurance, but I declined it. There was no pressure from the bank to take the insurance. The transaction was very transparant.
We should go through the documents and then sign them.
Rajeev
Good to hear that you had a better experience ..
Rajeev
Any specific reason why you didnt opt for option3?
Issue a legal notice to them, asking them to take back that insurence policy, otherwise, willa cheating case and also extortion of money, against the bank
Thanks for your suggestions .. lets see how this case turns out soon !
I see some mistakes done by the customer:
1. Before signing any paperwork, READ them carefully as well as show it to someone who understands the legalities and terms in those documents.
2. Before finalizing any loan, make sure you verify some key things like total loan amount you are responsible for, interest, payments terms, etc.
What can the customer do now? (all below items will try FOLLOW-up on the customer part)
1. report to Fraud division of RBI
2. report the matter to higher management of AXIS bank
3. report to consumer forum
4. remember, everything has to be in writing, so always give letters and take acknowledgement from people whom you submitted the letters
5. HAVE PATIENCE as NO one has time nor does they care about you so you have to fight your battle
In most scenarios, a STRONG follow-up and lot of efforts, back-n-forth with various authorities, influences, etc the matter might get some push and be resolved. If you have media person to help you, PLEASE use any help you get….
Since the loan amount is huge, corrupt people at various stages expect “malai” but be prepared to give a FIGHT. It may take time but eventually matter will be resolved in your favor, just don’t give up hopes….
Thanks for your suggestions .. We are doing what we can do
Dear
Write a compliant to IRDA grevience cell ,Insurance ombudsman and the Banking ombudsman and RBI Governor .How they mislead the customer.Or if they do not give response than make the bank party and insurance co in the consumer redressal form(consumer court).This is the way to handle them.
Yes Vinay
The next thing would be to go to banking ombudsman and consumer court, Note that IRDA and insurance ombudsman will not be of help here
Report the matter to the Banking ombudsman of RBI, to IRDA, Ministry of Finance, Ministry of Law, Justice and Company affairs and to the Prime Minister’s office. Before signing any papers, show them to a financial consultant/ chartered accountant/advocate who has the time and patience to go through every clause in the agreement and advise you even if it costs a small fortune. It pays in the long run. You may also file a cheating case against the Bank by consulting a good lawyer. All the best.
Actually if you look carefully the insurance is not for you but for bank and that too at your cost.
So tomorrow if you default bank can get the money from insurance company hence no loss to their profit.
Lucky
Thats not the way insurance do work, insurance has nothing to do with cheating/fraud by customers. Its the safety of the banks money in case of sudden death of the borrower.
banks do not have their own money to lend, but they lend money of depositors, that should be insured in some way; by future income of the customer, but what if the borrower dies before his commitment is fulfilled, his family has to pay that money, while the borrower is no more earning (died). Think… Borrower has to be wise enough to get benefit of the term protection plans.
just yesterday, I met a client who is applying for 6 lac of loan, his age is 63 years. If the insurer is ready to insure him with a one time premium of rs. 30k for 7 years of his loan period, whats the big deal. The customer was happy enough to get that plan, as his family will not get burden of his commitments.
I took homeloan from ICIC bank but they never force me to take any insurance,yes they explain me all about home insurance but it was voluntarily.
I am NRI and one of the Imperia customer of the HDFC bank. In the brochure and on the website, they offer host of free service for such customers. In reality they charge everything for the customer. They introduced the term called demand based waiver. If a customer notices the charge and he has to request for a waiver and the bank would look into the case and process through several of the departments and would let you know the decision . If customer do not raises any request or demand for waiver, it would happily enjoy the charges. In mycase it is even more worse. They don’t reverse the charges even while you get a mail confirmation that it would be done.
The banking industry irrespective of high end or low end customer feels that a customer should chase them for any of his/her work and this attitude needs to change. I just feel sorry for myself that even a high end FD deposit holder do not get a due respect from Indian PSU/Private banks.
Krish
Thanks for sharing your experience with us ..
The issue should be escalated to BCSBI and Compliance officer of Axis Bank immediately. All these banks are working behind ‘padutha’ (behind the screen) and cheating the public in all the ways by exploiting our laziness to read the documents and our sincere trust on the banks.
Will the Banking Ombusdsman set up by RBI be of any help in such cases ?
yes .. it has been helpful in lot of cases, but it takes some time 🙂 .. Kindly refer http://jagoinvestor.dev.diginnovators.site/2011/04/banking-ombudsman.html
A slightly positive news from my side. I had taken a loan of Rs. 20 Lacs from Corp Bank and the process was tedious. However at the end, the manager asked me to opt for insurance (term insurance) for the home loan amount and even reduced the term to 10 years. He said that anyways you might prepay the loan within 10 years, so why do you need to pay more premium? So I got a insurance for my loan for 10 K and the manager also earned a bit (thru commission). I guess it worked out for both of us.
Santy
yea . this much push is acceptable and it was after you knew whats going to happen and agreed to it because it made sense to you . Infact I would say this was a positive incident . But what happened with this guy was un professional
This is the case with almost all banks…
I had a similar experience at SBI..
I was switching my home loan from HDFC to SBI.. The outstanding loan was around 26 lakhs.. All the processing was done assuming 26 lakhs as the loan amount. The day I went to the RAC to sign the loan documents (and that is when I get to see my sanction letter!!!), i find that they have added 90,000 to my loan amount towards insurance. I had no choice but to sign it…!!!
Santosh
these banks are playing with emotions .. they know that once you are so excited and passed so many days in getting the loan, you will not change your decision on last day for a small amount (as percentage of the full loan) . I feel you should have complained about it later ..
Manish
Santhosh,
In SBI also they never force you to sign up the insurance, 90k may be sanctioned along with the HL amount, its upto ur decision to apply for insurance or not…
I had expierience with SBI,
Regards
Subin C B
They just proposed insurance, but clearly customer accepted in his own benefit, how can you blame the bank here… Banks are in sales channel and will always try to sell as much as possible, why not?
There is widespread misperception that a banker is a repectable person. He may or may not be.A banker can sell deceptively any product from pants to panties to make a kill. Not that PSU banks are blemishless but they are subject to more rigorous rules of discipline. In a private bank misselling is the regular practice rather than exception.The safety rule for the customer is ‘caveat emptor’ . That’s: buyer be aware.It is advisable to have the draft agreement vetted by an independent analyst or an above average lawyer before signing the bulk of documents. It speaks volumes that the bank here has so far not posted any comments on the allegation of ‘ cheating’ by misrepresentation.
Shibaji
Yes .. private banks do this more than public banks , they seem to have more pressure on targets and revenues !
This is cheating case from AXIS Bank. Bank must informed to client first and has to take permission before such matter.
I suggest that client should a write one letter to Branch office with cc to loan department and should wait for their reply. If reply is negative, client should approach Grievance dept of AXIS bank. If you doesn’t get any reply from 20-30 days, you should contact Banking Ombudsman with all your details of communication and reply from bank.
You will definitely get justice as I have done this practice with some of the banks including schedule bank. This is your RIGHT to take benefit at free from RBI.
If you are not waiting for such time or do not want to do anything as mentioned, you will lose your money only and nothing else.
Regards,
Rajesh Patel
Ahmedabad
Thanks for your guidance Rajesh
Your method is really structured and suggested to anyone who face issues like Nitin .
Manish
Thanks Manish.
I think in our system, everything is there to fight against any department. Only thing one has to wait for time consumed and communication.
My problem has been solved by RBI against SBI Bank & HDFC Bank and got positive solution.
Fight against any kind of Corruption !!!!!! You have to be in System to fight against the system (famous dialogue by Atul Kulkarni in “Page 3”) and I believe in it, else, you have no RIGHT to talk against corruption.
Regards,
Rajesh
now a days bankers are being forced to do all these to increase non fund income. now a days customer has to be very careful while considering any kind of loan. banks takes the policy for their borrower but only up to the extent of loan amount and the plan should only be term plan and the premium has to be adjusted in installment. if a customer has already taken a policy for the amount equals to the loan amount he can take the loan on this behalf and the bank will not take any further policy.
Yes
Banks are no one to put a compulsion on the customer , the maximum they can do is reject their application if a person does not buy the policy even from outside , but they cant just add the amount of the policy and issue it to him
Manish
My the comments so far here we cannot categories entire AXIS bank with instances like above .
For example i was never pushed for any insurance or even suggested to take term insurance during my home loan and home improvement loan from HDFC.
But there have been instances were my friends were forced to buy insurance ,but they closed it within lock in period.
It all depends 0n the people in those particular branches and their target achievement technique
Yes .. a lot depends on the officials who are handling your home loan case .. In most of the cases the misselling or I should say forced selling the policies .. only is small number of cases things might be smooth like yours 🙂
Banks have target and they are very aggressive in meeting those, so they do throw caution to wind in many case are do such shady things.
I remember an episode from “Sach Ka Samna” where a Bank Manager time and again confessed his wrong doings throughout the show. Watch the show here https://www.youtube.com/watch?v=X32sbhgCF6Q
As much as I agree that one should not sign without fully reading and understanding about what we are signing, its easier said than done. If I am given a document with a language that has terms and phrases, that i am not familiar with or have limited understanding, i have to either trust the person\organization or get second opinion. Since i have to get home loan i cannot avoid such procedure so one way or another i have to sign.
I think the solution here would be to simplify such documents and highlight the salient points in a summary view (again easier said than done).
Exactly our point. The onus should be on the regulator and companies
Chandermani
Yes I can understand the plight here .. but you also have to accept that these are big ticket purchases involving 40-50 lacs at times and for this size of decision, even if we have to put some time and effort to understand / learn the terms and conditions, its worth and suggested. We cant ignore them and just say , we dont know hence we cant do anything. The terms and conditions are really not in greek or latin that we need to do some course .. some points and words are there and a simple search and time spent would help us understand atleast 90% of things things . for rest 10% take external help . I personally think if you want to do it , you will , if you dont want to do it , you wont ..
What you do think about my way of looking at it ? Note that I appreciate your acceptance about it and really feel that terms and conditions should be simplified!
Manish
Using external help is something which people shy away from, being penny wise and pound foolish (I include myself in this category) . I too recently bought a house and had to go through decent amount of paper work for loan. There were parts that i did not understand but to my best abilities i tried to read it, and ask question. But again i was relying on the bank guy to some extent.
For a normal guy like me and you this seems to be a clear case of cheating, even if the law allows it. Any such major expenses should be declared prominently in the loan documents and should be clearly communicated by the bank verbally. I hope in this world there is something like professionalism.
Atleast to my case, I didn’t face any problem with HDFC Home Loan. Also, we are not much educated about all these hidden stuffs, the Bankers guided for each and every process. No much worries with HDFC.
I posted my experience because, new home loan takers should not worried much with HDFC.
Pras
Still I would say that one has to be very cautious and pay attention to what they are signing, just because you had a good experience with HDFC Home Loan does not mean all will have it .. you got good officials working on your home loan , thats all 🙂
This is just a cheating from Axis Bank. Mr. Mittal should go to consumers court against Bank. So that in future no any bank do such shameless work.
Alva
Yes .. but the only issue he will face is to prove that he didnt knew about this, he has signed the papers, how does he prove that it was without his knowledge ? I am just looking from legal point of view 🙂
I’m going to take Loan from SBi of around 20 Lacs in near futrue.Have anyone came across such practices against that bank and if yes, then plzz let me know so I would be cautious will applying and signing any document they tell me.
One of my friend taken a home loan for construction from SBI and he got free home insurance without any charges, But this was during recession…please check if they still have it or not.
Kinjal
You need to understand that these things are done by Bank officials and not BANK as such . SO these people can be same across all kind of banks , the only solution is to be aware and be clear about what you are signing
Manish
For any insurance product sold, the insurance agent / company has to show the client an illustration with 6% and 10% growth and get it signed from client. Was it shown to the customer while he was signing other home loan documents?
Mukesh
I am not sure that rule is really in force which you are mentioning ..
I am sure the rule is in place. HDFC did it even 3 years back when I took a term plan with them.
That rule is most definitely in place, but in this case it was a TERM policy wasn’t it, therein no illustration of benefits is required!
some banks do give concession in interest rates if customer takes term protection plan for cover of loan amount. For instance United bank of india…
Thats really good .. And I think they should because that way it becomes a secured loan instead of unsecured loan
Manish
My suggestion to Nitin Mittal is to follow the procedure of reporting the incident to banking ombudsmen
Web : bankingombudsman.rbi.org.in/
New Delhi
Shri M Rajeshwara Rao
C/o Reserve Bank of India,
Sansad marg,New Delhi – 110001
Tel No.(011) 23730633 / 23736270 / 23736271 / 23725445 / 23710882
Fax No. 011-23725218
Area covered
Delhi, Jammu & Kashmir, Haryana (except the districts of Ambala , Yamuna Nagar and Panchkula), and the districts of Ghaziabad and Gautam Budh Nagar of Uttar Pradesh
Thanks for your guidance and suggestion to Nitin !
THE MOST WORST BANK IN PVT.SECTOR BANKS.I HAVE AN ACCOUNT WITH FROM LAST 5 YEARS AND I DONT KNOW EVERY MONTH THERE WAS LVIED SOME HIDDEN CHARGES .WHEN I ASKED FROM BANK THEY DOES NOT ANSWER THEY SAID WE DONT KNOW.I LOST THOUSANDS OF RUPEES FROM LAST 5 YEARS WITHOUT TAKING ANY VALUE ADD SERVICES FROM THE BANK BUSHIT BANK =AXIS BANK.
Ankur
What hidden charges are they applying ? Are you maintaining your minimum balance or controlling your use of debit card at other ATM ?
I also had the same exprerience when I took Home loan with Standard Chartered Bank. I had signed some blank cheques as security and they encashed one of the cheque by deducting amount from my A/c as Insurance. I was not told about this by the agent earlier. What if sufficient amount was not availeble in my Bank Balance ? I would end up paying fine for bouncing cheque.
Now, I have learnt my lesson. I never sign any blank cheques or documents without reading fine print.
Pradeep
Did you take any action against them , This is really not acceptable at all . they cant use your blank cheques like this .
Dear Manish,
I could not take any action at that time due to personal problems at that time. I was working at Hyderabad and had availed Home loan from SCB Bangalore. Anyway, I closed the Home loan one year back. But, wanted to inform public at large to be aware of such tactics from SCB
am in the process of getting Home Loan from HDFC and this post has come up in the right time.. My loan is approved and during disbursement time I will keep a note of the amount I am getting as well as take it a point to read all the papers before signing… I will even directly ask them if there is any extra insurance amount added!! Thanks for intimation.
Yes Yogesh
I would rather suggest that you tell them that you have taken a Term plan for 2 crores (just lie) , and your home loan would be covered . And tell them that you heard that forced/cross-selling is going on in different banks and one of your friend also faced it and complained about it with banking ombudsman and won 🙂 . So that at the time of sign the papers, if there is anything added, you dont get into the conversation of removing it . Make sure you communicate to them earliar .. that would be better.
Manish
I think the fault is on our part too.We take no pain to read & just sign anywhere the agent or officials points and never ask question about it.May be we donot care much and trust the people.
For axis bank they have targets to sell insurance policies I guess .I had gone to axis bank for locker facility and they asked me to buy a pension plan to avail the same.
But thats the same case with SBI and HDFC , only they had offered ULIPS .The thing is I end up with no locker facility.
I have signed on blank forms previously myself and the agent then fills them at his own leisure.How about asking a zerox copy of all the documents you fill up and give?
In my case I have taken loans from LICHF and wanted to take the home insurance but they informed me that there is no such policy available from the LIC (they have stopped it).Was lucky to not get into the trap at that time.
Suhas
good to hear your case .. Note that I agree that investors have to pay attention to all these things and see what they are signing .. The onus is also on the companies and regulators .
Did you ask those banks about the rules of the banking on opening the lockers ? What is the rule for that ?
Well, we might scream over the top of our voices that this is cheating. But this is the normal way of life in India. This is a strong cultural trait, and will take generations of prosperity accompanied by accountability to change. Till then, we need to really be on our guard. In India, most relationships are loose-loose, one has to forcibly take in order to get. We live in a scarce inner world, where there isn’t enough for everybody and the only way to get what we need is to snatch it from those who cannot retaliate. YOU or ME.
Our consumer forums are getting stronger, but not strong enough. But for Nitin Mittal, there should be banking/insurance ombudsmen and consumer forums he can go to. Given his 45L loan, he puts himself in the upper middle class category where there are options provided we invest the time to seek justice however long it takes. If he were in the lower middle class, only God could have saved him (in his afterlife) from the Indian scarcity psyche….
Thanks for your comment Rajaram 🙂 .. I agree that consumer forums are getting stronger, but how many really are going to go till end out of millions 🙂 . The real fix has to be done at the other end 🙂
Manish,
The corporates come from the “scarcity” paradigm. They will not change until their behaviour impacts their sales. When threatened with action, they literally laughed it off. They are almost sure that nothing will be done (and they are correct too). And threatening to leave their service makes no difference either. There are always the next 100 fools waiting. And the corporates know that their competition is equally notorious (socialism at work!), and that there are costs of switching services to the competition. So they get a sense of security in the mediocrity around them.
I agree with you that consumer forums will have little bandwidth to attend to every case in a large consumer population such as ours. Since corporates will not change, and consumer forums are not the answer either, the only solution is in ourselves. Take care of oneself, protect oneself against mediocrity and dis-service. Reject bad service, even if it means giving up the desire for a product or service that we wanted.
Even then, we will get taken for a ride 40% of the time in a strong culture that exists in India. But getting it right 60% of the time will get us through to a better place. 🙂
Yes Rajaram
You comment is very well thought and your comment has obsolute clarity 🙂 .. Exactly thats how the system is 🙂 .. thanks for your comment , these discussions atleast open up some minds 🙂
W.r.t. the above and the previous topic. Is this insurance taken along with the home loan considered as individual’s insurance and needs to be updated to LIC (endowment policy) ?
Yes Varun
Its very much a individual insurance and it has to be communicated to any new life insurance company when you take it, but only if it was an old one. If you took a plan from LIC earliar and later took this additonal linked insurance,then you dont need to communicate about it
I was also a victim of ICICI bank. Bank has forcibly sell insurance product along with home loan. Due to urgency of loan i have taken that insurance. But when i got policy document, i cancelled that policy by using free look period (that 15 days in all type of insurance) and that amount deposited with ICICI bank as prepayment of home loan.
Haha .. really good one .. thats what was suggested in one of the earliar forums too 🙂
What an IDEA sirji
🙂
At the outset my views in no way justifies Bank selling Term Plan without seeking consent of customer.
But let’s look it from different perspective, any liability should be protected by way of insurance coverage so that burden does not fall upon near & dear in case of eventuality. Bank is in business of deposit & lending and are no way interested in taking over property in event of default. Hence they protect same by recommending Term insurance Plan which cheapest. Single premium Term plan are more economical compared to regular premium plan (though I am not sure if Max New York is cheapest for his age) and offers lowest commission (2% to 4%). However it has two disadvantage
1. You pay for entire 20 years upfront where as as per stat people square up home loan in 7 year (value of money goes down, income rises etc.) and hence one loose premium paid
2. Normally Term Insurance against Home Loan are reducing cover where as with rising income people go for more than one house so it is advatageous to go for flat cover rather then reducing cover when one is insurable.
A customer should make sure that in policy taken, his spouse and not the Bank should be nominee so that in case of any evetuality the spouse should be in a position to decide (depending on then prevailing circumstances) if spouse desires to foreclose home loan to use the amount for other urgent pressing need.
In nutshell, it is hghly recommended to go for Term Insurance to protect liability falling upon near & dear ones in case of eventuality. One may explore option which offers best cost effective solution.
Thanks
Pankaj Gera
Yes Pankaj Agreed
BUt the only point is the client should know that he is being sold that 🙂 .. in this case it was never informed to him 🙂
sir, YOU ARE SAFELY FORGETTING ONE THING. BANKS do not give loan just free, It is against the property . In INDIA all the property values have gone up at least from 1947. So even if the bank sell the property they will not be a looser. . WHAT THEY do is CHEATING. like some docs say get these tested form this lab only . This is no difference from this.
As a Potential & Prospective client please exercise your rights and caution while signing any documents ,more so with a financial institution. In spite of the fact I am advising my clients on various issues I had to face a peculiar and rather amusting ( since I was aware of the Game plan) of an NBFC in this case INDIABULLS when they sanctioned Loan , where the RM first try to push through the Insurance Papers along with other Papers which I refused and warned politely and later was persistently called by ICICI with whom this branch/RM had a tie up. I formally complained to the Branch Manager ( who was an ex ICICI) and it stopped. It is another story that the Loan did not go through which was actually blessing in disguise. I finally went through a PSU Bank who to my surprise were very open ,understood the requirements and left the Risk Management of the property/Life to take from whichever Vendor I desired.
The bottomline is eventhough the Bank is paying interest , it is not CORRECT/UNETHICAL to push a case of INSURANCE just because the customer is “borrowing” and exploit. Use your RIGHTS/PREVILEGES and even if this is beyond FREE LOOK PERIOD you may BRING TO THE NOTICE OF THE INSURANCE CO who may , for all you know issue refund ( I have assisted some clients on this) . Also formally bring to the notice and use all the escalations availabvle to get a redressal.
Patience get rewarded always !!!
thanks for your views and sharing those experiences
I would rather request not to sign on any blank paper/form. The person can read, write and understand English, he obviously signed on the proposal form, he might be appeared for medical tests, he might have seen loan offer letter. Then he did not understand, really shocking!! Lack of financial literacy!
Thanks for your comment Uttam ..
Does these private banks come under RTI?
Can we get the full picture of what has been sanctioned, different cost break up, viz loan amount, insurance premium, processing cost, etc… from them bank? After all, it is the right of customer to know what are various charges, and whether the bank is abide by what it said during loan approval time?
They do not come under RTI , only govt bodies come under that , but most of the things you mentioned will be given by bank if required to the customer (may be not to the stranger)
Sure, banks do give copy of sanction letter to customer along with all documents signed by them, but customers dont even want to read the sanction letter before signing it in joy of getting loan.
Thanks for bringing the incidence in light. Actually it is our mistake or negligence that we oftenly forget about this small things in joy of big achievement. The paper which we signed is fully loaded with information. So we can’t challenge later after signing. I am also a victim of this same situation in different way from HDFC. With my due permission in the name of insurance against housing loan amount their agent made me fool and invested my premium amount in unit linked life insurance with a high premium. Which has no relation with the loan and came to understand just because of a small doubt and enquirey with the HDFC loan issuing branch. Naturally I had to carry the same till three years as per the norms of unit linked insurrance which is driven as per NAV value. And lost around 60% of my hard earned savings as their commission and mortality charges.
In my language their is Proverb “Think and do. Do not think after it is done.”
Ultimately understood the significant of the proverb.
Sanjib
Thanks for sharing your case .. really signing the documents has to happen only after proper reading of documents , else not !
We savers must be united and think of collective action to draw the attention of the regulators. Otherwise this will continue. We are trying to do this through the Moneylife. Join 10,700 others
Above matter is very useful for housing loan seekers, so that they remain alert while signing the papers.
True. But we at Moneylife have a different argument. Why should we be subjected to these kinds of products and practices at all? Which one is easier to do ?
1. Insist that millions of people be watchful at all times or
2. Control the selling behaviour of a handful which are under strict regulation otherwise.
Yes Agree with you Debashish
Its much easier to keep the regulators and company on knees and control what they are doing , rather than asking millions of people to get “informed” .. while investor education is important and should be done, that has to be secondary atleast in current times and only in a span of next 5-10 yrs , things can be expected to change on investors awareness front .
What do you say ?
Manish
i have an even “radical” approach. It should be like this forever, not 5-10 years. Savers are not hardwired to understand money as behaviourial finance has proven with experiments
That makes sense !
Tell me ONE regulator who is willing to listen to the small investor, show us one instance where SEBI or IRDA has really acted for the small investor especially in cases like these where Banks are involved, In my experience it is only the Banking Ombudsman who has really worked for and protected the “interest” of the small investor.
Yes Deepak
Thats what we are saying that the final onus should be put on the regulators and companies and not customers
I am also a customer of Axis Bank and I had taken a home loan of 17 lacs in 2009. During the same Period I came to know about this practice by Axis bank where in they were trying to sell the insurance product which premium was around 70K. Clearly I have told them I only need Home Loan not the insurance. If Insurance is needed that will be my decision and I will decide from where to take the insurance to cover the loan. I asked them if they are ok with it then only I will take the loan or else not. After a lot of discussions finally they have given the loan with out any insurance and after that I have taken a term policy of 50 lacs which will be benefitted in long run.
But I think there are some faults at our end too. We should read all the documents, terms and conditions and ask them as many questions as possible. and also negotiate on various terms.
Thanks for sharing your experience Vijay 🙂 .
I agree to Sarvesh Gupta. It is very bad transaction from bank side but you have to understand one thing that… all docs you sign…it require your attaintion and you should know why you are asked to sign… This is matter of property where big sum is involved…..we have to be careful from our side…and this will make our case weak when we try to take action against them…one thing what i would suggest here is you cant do any thing to bank but u can create trouble for that person who sold u this loan. we should write letter to High post authority and bring them into thr notice about what that guy has done and how he is cheated you….not bank but let that guy pay price if we make sure bank understand this wrong doing…you can tell bank if they dont take action u will switch to othere bank but will not let them earn interest..if they dont take action…threat them…as far as transaction is concern..i dont think any thing can happen now….but what we can do is start looking for other bank which almost charge you almost same interest but switching cost is not high…close the relation with axis and switch to other bank…..this way Axis bank will loose u as customer and interest which he would have earn from you…..if you cant reverse transaction and u have to go through that cost thn y not to pay other bank….dont let Axis earn that money….just have to make sure switching cost is effordable…. however this time involve any expert in trascation coz…..u should not get it into othere issues……but it is almost know fact that bank need insurance for any homeloan…so he should have know those thing…..
THanks for your views Amit ..
I recently(abt 6 months back) took a Home Loan from HDFC and when all the formalities were completed a neatly dressed executive(goons in disguise) came to me, the conversation started by explaining all the rules and after 10 mins or so, he talked about the past tales of loan applicants demise and how there families has to leave the possession of their home.
He suggested the same should never happen to me and asked me to take a insurance. i told him I already have a 1 crore term insurance, initially he was a little taken back by my reply but then suggested why don’t I take additional insurance.
I told him that i will take this insurance provided he gives in writing the commission he(HDFC) earns, he said he will get back to you and ONLY 6 months has passed since and i am eagerly waiting for his call…
Haha … good one 🙂 .. Thanks for sharing your experience.. Let us know when you get the call 🙂
when I took homeloan from Axis, I was told that foreclosure is without any penalty. But their executive filled my form with another option in which I had to pay foreclosure penalty within 2 yrs. When I closed that loan 2 months back, I had to pay the penalty.. Never trust these banks.. simple person is screwed by everyone… noone will spare him/her…
w.e.f. april 17 RBI categorically stated and warned that BANKS SHOULD NOT IMPOSE PRE-CLOSURE PENALTY on floating rate loans irrespective of time limit or outstanding balance. so better get clarified with RBI direct.
Thanks for that information 🙂
Please ask for loan offer letter after sanction of loan.
I saw that… but I didnt see that penalty clause. and there something called trust which you do on a person to whom you are interacting..
RBI has announced that there is no foreclosure penalty. Approach a consumer court with your matter.
ABP
I think that came recently.. its not implemented yet ! . Let me know If I am wrong
http://foreclosureindia.blogspot.com/2011/11/sbi-abolishes-penalty-on-pre-payment-of.html
Manish, maybe its not yet law, but RBI had suggested to banks to do this in Dec2011 and many banks followed suit immediately (SBI, ICICI, Central Bank of India etc). The link above clarifies the matter. Probably, one may draw attention of the bank to RBI advice; if they insist, then people should find other banks (a PSU bank could be better than a private bank in this case).
It was only for NHB;s and not all banks .. now it will apply for all the banks
Dheeraj
Did you check the form after it was filled , thats where is issue lies.. you can tell them what you want, but who knows what they will do finally 🙂
In my case IDBI Bank told me in advance that I have to take extra insurance policy other than my current LIC from them. They have given me IDBI-Fortis Term Insurance policy and I am paying premium alongwith my EMI. Plus they told me to take Home Fire Policy from Bajaj Allianz.
After checking with my friends I came to know that this is common practice of many banks to force their customers to take such kind of insurance whether they required it or not.
This is not a requirement . Its just pushing to make sure that the home is safe and in other words they are safe 🙂
For the purpose of fire insurance for home, I think it should be made mendatory just like that of bike or car insurance.
Yes agree to Manish…. and this many stuff u have to purchase only in the case where Bank is offering you Big loan or loan at compatative rate. To reduce the risk of default in case of loss or damage to property for Big loan amount, this is kind of mandetory…….not officially but no one will give you big Loan if you dont buy that….ultimately they wanna make sure….they are away from all risk other and they only have default risk and pre payment risk…..
Just want to play safe in some case…..
Thats y it is not known…but the fact is….. .when u go for any home loan…u dont have to just see lowest int home loan….u have to see all this stuff….a complete package should be competitive not just Interest…..
Had similar experience with IDBI Bank who sold me two insurances – homeowners and property insurance, as a requirement of credit sanction process. No one in IDBI Bank including senior management was ready to assist with justification.
Raaj
Can you share in detail , what did you do after that .. did you just accept that and living with it ?
I, as a banker, do suggest all my clients/customers to get their loans covered by both term plan for life as well as fire or other appropriate insurance immediately, these are cheaper than anything and one time premium too… Plus in some banks they do have insurance products for accidental death, such as rs. 17 for rs. 1 lac mediclaim insurance for savings account holders.
Yes Lokesh
Its suggested , but one cant issue it without informing or taking permission, thats the problem here in this case
Lokesh….Bank make rule….but person in sales missuse it and represent in their own way….and many time is wrong….
In some case they will say mandetory (even if it is actually not) if they come to know ppl are needy and have to come to them…and in some case they dont say just make sure they able to bundle everything they can….without asking ppl…whether they req or not….
Mistake are from client side too but u have to understand…some skills of this sales ppl are so good to prove you that whatever they say is right….
I have availed a floating rate home loan from Reliance Capital. They had promised me at the time of that my rate will be always at par with their new customers. But now they charge me 13.25% and they charge only 12% to their new customers. Whom should I complain?
Regds
Narendra Pati
What is their explaination to this ? Complain to banking ombudsman now
Thanks Mr Manish. But How to do?
Thanks again
Regards
Narendra Pati
I checked the RBI site but it is not covering NBFC. Only banking companies are covered and Reliance Capital is not a bank . It is not appearing in the list.
Regds
Check this article for banking ombudsman : http://jagoinvestor.dev.diginnovators.site/2011/04/banking-ombudsman.html
Manish
I did complaint to Banking Ombudsman but did not get favorable response. The Bank did not pay any attention to my complaints though I wrote to their Grievance cell. I am living with both the policies of their choice, where they get better commission while cross-selling of products.
Regards
IDBI BANK , I entered the bank to deposit money for an FD .Now i was conviced it would be good to have a SB a/c too. So i proceeded to listen to the formalities for this ,now during this disussion midway i was being told a new product had been launched ,despite my question as to whether it was a insurance product i was told NO . So i patiently listened to the guy with a Tie. I asked him for a copy of the brochure of the product ,claimed i was a lawyer and would read the legal fine print before investing.Immediately the face changed colours ,always read before doing anything .
Haha
Very good incident 🙂 .. but are you really a lawyer 🙂
idbi tried to con me in similar manner. I told them that I dont need their loan. after two days, they called back and offered loan without insurance which i accepted. though you are absolutely desperate for loan, do not show it to the banks. The banks are very desperate to disburse loans as it is their livelihood and not ours. They will come around to our terms.
Good one . obviously they just try to put the pressure on you . just say “i dont need it” and 2 days they will get back to you
I am in the process of getting Home Loan from HDFC and this post has come up in the right time.. My loan is approved and during disbursement time I will keep a note of the amount I am getting as well as take it a point to read all the papers before signing… I will even directly ask them if there is any extra insurance amount added!! Thanks for the headsup guys!!
More than that you just keep a note on what you are signing. Just ask what that paper that you are signing is about.
You should read the documents very thorouly before signing and make sure why and what is that signature is for. You can straight away reject saying that if there is an extra charge you will not go ahead and in most of the cases if you do not sign also they will sanction you that loan without that insurance
Yes .. please make sure you ask them before hand , I would say tell them now itself
Sudarshan,
Take your time to read thoroughly even it takes days. Ask them if you have query.
Dear Sudarshan
I have also taken loan from HDFC. HDFC while sanctioning the loan issue you HDFC Ergo Insurance and this amount they will considered in your home loan. Never do this because they will charge interest on your insurance. Instead, if you want property insurance from HDFC Ergo then ask them I will arrange the same from my own fund. Again, I think the policy is allowable under section-80D of the Income tax act. By this you will take property insurance also and get income tax deduction also.
I have done the same thing.
@Prashant… Thanks for letting me know about this.. Will certainly do it 🙂
This is not only with Axis bank but with every institution and life in general. There are many fine prints that they won’t tell you in advance. Now we can complain about unfair behavior but we should consider that
— nowadays when we apply for loan many even never go to the bank, all process is done by middleman/agent for our convenience.
— Loan documents require a lot of signatures and there are lot of docs, so we don’t bother to read them and rely on agent.
This kind of unfair practice exists all over the world and are going to remain here. We need to be vigilant. This may not be possible always but we need to be more or less alert depending on stakes.
I do agree… Sales should be a clean sale. Can bring to the notice of IRDA grievance system, which every insurance company has integrated in their Website… or report to ombudsman cell in writing and specify the concern person name.
Rgds
Srinivasan
These practices has to be stopped by RBI by making sure something like most important terms and conditions as the last document to be signed before disbursing a loan or selling a investement plan. This should clearly state the amount to be disbursed or invested, emi or money back amounts, tenure, any second or third product even minutely linked to the loan or plan. This should be signed by the customer and the branch head/manager in person with both parties present. Most of these agents or employees are not even aware of what they are doing it is the branch heads who get sales targets and plans such dirty maneouvres to cross sell products. So they should be made accountable or else they will keep shifting companies and customers has to suffer with the same company for decades to come.
Hmm .. yea .. the branch manager should be held accountable for this as he is the manager and he is responsible on what happens ..