SBI Demand of Retrospective interest rate change on Home Loan

POSTED BY rajeev4 ON July 29, 2014 10:02 am COMMENTS (5)

Let me start with the background of the issue for which I have raise the complaint with SBI /Nodal officers and didn’t get the resolution and seeking advice. I have taken a home loan from SBI, Electronic City, Bangalore Branch in Nov-2005 with Fixed Interest rate of 7.5% and continued to pay the EMI till now on time through Auto debit from my linked Saving account regularly. I am receiving final and Provisional interest/principal certificate every year from bank which states the amount I paid for that financial year along with interest rate applicable.

To my surprise on 21st March 2014, I had received a letter from SBI RACPC-II, Koramangala office, stating that effective interest rate applicable is 12% w.e.f 28/11/2008 and 12.5% w.e.f. 28/11/2011 and I have to pay the difference of interest for that period with retrospective effect? After multiple followups after raising objection with branch and escalations to nodal officers, Branch is telling me that they are not receiving response from RACPC on this and as per the process they have been asked to recover the amount from me. It is very annoying to hear word ‘Recovery’ from bank official as I have been always prompt on my side on any payments related to my loan except this unreasonable demand which is not due per my opinion.

As per the process on SBI website , I have raised the complaint ticket # HL904412603094 on 3rd June 2014, which was referred to Branch manager of Electronic City Branch. When I spoke to them answer is again same that they are not getting clearance from RACPC and been asked for recovery of amount which is not due as per my understanding.

Please suggest my options now and how come bank can even send this illogical demand.

5 replies on this article “SBI Demand of Retrospective interest rate change on Home Loan”

  1. Credexpert says:

    Dear Sir,

    We suggest that you also read you loan agreement carefully before proceeding with any action. Typically, banks cannot change the interest rates on a fixed rate loan unless there is a clause which allows them to do so. Even if this is the case, the bank should be requird to intimate you on the change in rate and the reason for the same in writing.


    1. rajeev4 says:

      I have Looked at loan agreement and as per Loan agreement Bank can revise interest rate every 3 year. But i have never been informed of these interest rate changes in Bnak which should have been done in 2008 and 2011 respectively. I am going to bank every year and asking them to reconfirm the interest rate changes if any. Which they have not informed . I have confimration from bank for all these years in term of intereste certificate issued by bank which clearly state the interest rate applicable. Issue is that bank has not informed me as consumer in time and after 6nyears asking for retrospective charges, which is not fair on behalf of bank. If it is an error or issue on bank side , they should not expect customer to pay for it.

  2. rockingguy says:

    File complain with RBI Banking ombudsman. RBI will analyse your issue and take necessary action. They might also issue compensation for any loss suffered

    Complain form and other details are available at

    1. rajeev4 says:

      I have tried that route as suggested – But I have not found them as useful or authority with an intent to provide justice. They have not even called me for presenting my facts but closed the case and asking me to settle the case with bank. If bank is ready to settle the case than I have no need to go to Banking Ombudsman. I have not left with any other option but to go to consumer court now.

  3. Raja says:

    Contact the banking ombudsman

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.