Consumer forum directs bank to compensate loanee

Source:- indiatimes.com

KOCHI: The Consumer Disputes Redressal Forum, Ernakulam, came to the rescue of a family which had availed a home loan of Rs 10 lakh, but were never intimated regarding the upward revision of interest rates.

The forum ordered the ICICI Home Finance Company Ltd to pay an exemplary compensation of Rs 10 lakh to Muvattupuzha natives Sagar T Joy and his father T D Joy, who took a home loan of Rs 10 lakh from the bank in 2005. The family approached the forum after the bank refused to close the home loan account and return the property documents. According to the petition, Sagar and Joy had took the loan on floating interest rate from the Muvattupuzha branch of the bank in 2005 to modify their house. The EMI was Rs 13,378 and the repayment period was fixed at 120 months. The complainants used to remit the EMI without any default. When Sagar reached the bank on to get back the property documents at the end of the loan period, he got the shock of his life as he was asked to repay Rs 15.42 lakh through EMIs of Rs 12,481 for the next 10 years and four months or pay Rs 7.45 lakh as lump sum to settle the loan.

The bank officials said the interest rates were revised as per the guidelines of the RBI. But the bank never communicated this with the family during the 10-year period. The bank also started revenue recovery proceedings and intimated the names of Sagar and his father to the Credit Information Bureau India Ltd as defaulters.. Sudeep Nambiar, head of home loan collection of the bank in Kerala said the borrowers in this case remitted EMIs every month without any default but did not enquire any default but did not enquire about floating rate that keeps changing.”We can settle the issue with a reasonable amount if he approaches us,” he said.

The forum also asked the bank to withdraw the intimation of the names of complainants given to CIBIL and pay Rs 10,000 for cost of proceedings.