Dear Sir/Madam,
I will like to raise the subject of Unfair trade practices followed by ICICI bank in Ref to my Loan A/C LBDEL 00001189840.
The Issue this when I took the Loan it was offered to my @ 7.25% Floating and ICICI representatives promised that their PLR is Linked to the RBI Rate and will follow similar trend to RBI. ICICI bank at that time had the ICICI PLR 8.75% with dicount of 1.5%, my Floating rate at the time worked out to be 8.75-1.5=7.25%. During 2008 RBI has been guiding the industry for interest rates to go up and here ICICI bank was forthcoming to follow RBI guidelines and increased their PLR and hence my Floating rate also increased to around 13%.
This is fine as long as ICICI bank PLR follows the same trend as RBI, however when RBI started drive the industry to reduce interest rates down, ICICI bank didn't follow the guidance rather than reducing their PLR in line with RBI, they started increasing the discount % to new customers. Thus trapping the old customers to their unfair trade practice to abstract maximum profitability from the existing customers.
When I took the loan it was based on the Trust that ICICI PLR will follow the similar trend to that of RBI, this is hence breach of Faith of the customer. Banking institutions as supposed to be honest and transparent, when I took the loan or for that matter any other customer start any relationship with the bank, this relationship is based on TRUST.
I will hence Like to raise some questions, this is extremely important issue and like me many others are experiencing the same issue and difficulty:
1. Is it not unfair that bank offers different discount % on their PLR?
2. What's the Logic of Floating Rate of Interest if the PLR doesn't follow the Regulatory Guidelines, RBI in this Case?
3. Is is not unfair trade practice to milk existing customer (who are trapped) and be competitive through increasing discount factor to new customer's?
4. Why an existing customer have to pay more interest (way too high) not in line with current industry rate Regulated by RBI?
5. Current Loan rate offered by SBI is 8% while I am still being charged @ 12.25% by ICICI is it Fair to pay 4.25% ADDITIONAL INTEREST?
6. If Bank despite many repeated requests doesn't act to reduce ROI, why customers should be liable to pay forclosure money 2.25% of Principal outstanding?
7. Under the condition that Bank is non competitive customers should be able to change over with other bank without paying forclosure fee. Why not? this will make banks behave and offer competitive ROI in line with market / industry.
I am feeling cheated by ICICI bank simply because when I took Loan Loan Account LBDEL 00001189840 ICICI bank had offered me loan @ 7.25% floating and was one of the most competitive banking loan rates offered at that time. Overtime the market situation and RBI guidelines on PLR pushed my rates to very high 13% or around. While ICICI bank was very forth coming & proactive following RBI guidelines when the rates were increasing and my rate of interest (ROI) was increased from 7.25% to 13%, the attitude of the bank has been completely different when RBI is directing the rate of interest go downward. ICICI is hence acting in to abstract maximum profitability from customer who were trapped by not lowering the rate!
It is very unfortunate that bank behaves in this selfish manner, hike the rates whenever the Govt / RBI guidelines advise however when the guidelines turn the other way (Reduce ROI) ensure not to pass on the benifit to customer and abstract profitability from trapped customer's. Completely ignoring RBI guidelines.
This compliant is being sent with hope that someone will act as this is extremely important topic for so many people who are being trapped and bank is milking profitability from them, even demanding 2.25% forclosure fee in case they try to switch.
Rgs
Prashant Agnihotri
Head of GSM/EDGE Business
Nokia Siemens Networks
Mob: 91 9810060687
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