Home Loan Interest Rate – Revision and Maintaining the Cash Back Benefit in ICICI Bank

POSTED BY sanghanidhaval ON November 19, 2014 9:27 am NO COMMENTS

Dear Sir,

I have availed a Home Loan facility from ICICI Bank on 31st Mar 2013 at floating rate of Interest of 10.5%. The Margin offered at the time of availing the Home Loan was 0.75% above the Base Rate of 9.75% prevalent at that time.

At the time of availing the Home Loan, I was offered facility of Cash Back at 1% of the monthly EMI amount, which shall be credited yearly against the Outstanding Principal Amount.

It was confirmed by the bank that the Cash Back benefit will be applicable throughout the tenure of the loan and revising the loan rate in future will not influence this benefit.

On 9th Sep 2014, I visited ICICI Bank for revising the margin offered and requested to revise it to 0.15% from existing rate of 0.75%. The request was accepted and at this point, I had taken confirmation from the Bank Executive, that the cash back offer shall be continued (but this was confirmed verbally). It was confirmed by the Bank Executive that the benefit is applicable throughout the tenure and revising the rate will not affect the additional benefit offered with the Home Loan.

However the service request was not closed by the bank and ROI was not revised. The Bank Executive informed me on 24th Sep 2014 that only one option can be exercised i.e. either the margin will remain 0.75% and cash back of 1% will be provided or else if the margin will be revised to 0.15% the cashback will be stopped.

Kindly note that in none of the documents provided at the time of availing the loan, it was mentioned that this benefit would be discontinued if rates were revised in future. I had discussed this while availing the Home loan also.

However, since I am holding a very long relation with ICICI Bank, I did not wanted to transfer the Home Loan to other Bank and that is the reason why I approached the ICICI bank for rate revision.

I had paid a conversion fees of Rs. 2500+service tax which was credited back by the bank before few days on the pretext that only one option can be exercised

I have send several mails and made several calls to customer care/home loan department of ICICI Bank from 9th Sep 2014 but all in vain.

Requesting you to please guide me in this matter. What actions/measures I can take against the ICICI Bank in order to avail the Cash Back Benefit of 1% and Revise the Rate of Interest by paying conversion charges.


Dhaval Sanghani

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