» Business & Finance » Review / complaint: ICICI Bank - ICICI bank not converting home loan methid as per RBI circula | News #288908

ICICI bank not converting home loan methid as per RBI circula

I took home loan from ICICI bank Nov at interest rate of 9.25%. During this period ICICI increased the interest rate for new customers to 10% but for me it was increased to 11%.

I came to know that due to similar consumer complaints ICICI had asked banks to come out with new base rate system and allow exisitng consumers to shift to new system at no charge.

I wrote to ICICI bank customer care. They called me and told me that I cannot change from existing FRR method to Base rate method as bank management has not taken a dicision on it. I was told that I can continue with exisitng FRR method and my interest rate can be reduced from 11% to 10% if I pay 0.5% as administrative charge and also need to sign a new contract that I have choosen to continue with FRR method. Customer care also told me that even if ICICI bank's managament approves and moves me to Base rate method interest rate will stay at 11%.

I told the support to write this on email. I did get an email but only mention was for FRR and there was no mention of base rate method.

I need help in reducing my interestrate to what ICICI offeres to new customers, convert my loan to new method and at no charge as per RBI guideline.

I have pasted below the amil from ICICI and the RBI circular number regarding this:


DBOD. No. Dir. BC 88 /13.03.00-10

Except from RBI circular:

"In case existing borrowers want to switch to the new

system, before expiry of the existing contracts, an option may be given to them,

on mutually agreed terms. Banks, however, should not charge any fee for such


ICICI Email:


From: Samar Gupta

Sent: Friday, March 11 10:15 AM

To: 'ICICI Bank Customer Care'

Subject: RE: RE:'ICICICARE=040-996-458' Change home loan interest rate: NHDEL00000747027

Hi Vinay,

Please also confirm as per our discussion that this switch will only be on FRR method and as of now ICICI bank is not allowing existing home loan users to switch to new base rate method?

Best regards,

Samar Gupta

From: ICICI Bank Customer Care [mailto: [email protected]]

Sent: Wednesday, March 09 3:28 PM

To: Samar Gupta

Subject: RE:'ICICICARE=040-996-458' Change home loan interest rate: NHDEL00000747027

Dear Sir,

This is with reference to your e-mail dated 7th March to regarding your Home Loan account NHDEL00000747027

We refer to our telephonic conversation on 7th March on at and understand that your query is attended.

As discussed, As a service gesture, our existing customers are provided with an option to switch to a more beneficial margin in case the same is being offered by the Bank. This switch in margin has cost implications for the Bank including, but not restricted to, operational costs. Therefore the switch is offered only on payment of a switch fees and carrying out necessary documentation to the satisfaction of the Bank.

Subject to the rate availability, if the customer desires to switch to a lower ROI, the same is possible by a change in the margin. For this change in margin, the customer is required to execute a revised agreement and pay the applicable switch fees.

So request you please visit the nearest loan branch for more detail.


Vinay Singh

Customer Service Manager

ICICI Bank Limited

&--Original Message&--

From: Samar Gupta ([email protected])

Date: Monday, March 07 04:01 PM

To: [email protected] ([email protected])

Subject: Change home loan interest rate: NHDEL00000747027


I currently have a floating rate loan number NHDEL00000747027.

The interest rate has been recently increased from 9.25% to 11% (I am under FRR scheme). I understand that interest rate for new home loan customers is still less than 10%.

Please let me know the following:

1) Will there be any conversion charges for reducing the interest rate equivalent to new customers under FRR scheme? What will be the interest rate?

2) Will there be any conversion charges if I switch to l-base method. What will be the new interest rate?

Best regards,

Samar Gupta

Company: ICICI Bank

Country: India   State: Delhi   City: South Delhi

Category: Business & Finance


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