Bank Home Loan
Standard Chartered Bank Fleecing home loan borrowers

I availed home loan from Standard Chartered Bank in 2004 (Loan account no.47438452) when their BPLR was 11.50% and the rate applicable on my loan was 7.50% (floating). Subsequently, SCB created a new reference rate called “Mortgage Variable Reference Rate” and linked the home loans to the MVRR instead of BPLR and started increasing the MVRR at frequent intervals. The present reference rate for home loan i.e MVRR is 17.75% as seen from their website which indicates an increase of 6.25% during last 4 years for existing home loan borrowers. SCB’s action of having multiple reference rates for various loans is in violation of RBI circular DBOD. No. Dir. BC. 6/13.03.00- 08 dated July 2 (also see FAQ no.28 at http://www.rbi.org.in/scripts/FAQView.aspx? Id=51#ad). Public Sector banks use a single reference rate i.e. BPLR which has been increased by only 2% to 2.50% and hence home loan borrower of PSU banks have suffered an interest rate increase of only 2% to 2.50% but due to the violation of RBI norms by SCB, home loan borrowers of SCB have suffered an interest rate hike of upto 6.25%. As, Public Sector Banks continue to make good profits, it is clear that the exhorbitant increase by SCB is not market oriented and is not in the interest of Indian citizens. As SCB charges a hefty prepayment charge of 2.85%, the existing borrowers are not able to freely switchover to other banks. I have already brought the above violation to the knowledge of RBI earlier this year. I understand that no action has been taken by RBI as SCB continues to violate the RBI norms. Because of the lack of action from RBI, number of home loan customers are being fleeced by SCB. Perhaps, SCB is making all out efforts to boost its profits in India, so as to overcome the global crisis. It is clearly failure on the part of RBI in its supervision role of banks.

Company: Bank Home Loan
Country: India

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