All,
This is an attempt to rescue all future home loan borrowers from refraining to apply loans from ICICI. Please read on and you will understand why.
I applied for home loan with ICICI under their floating rate scheme. Floating rate means rate will fluctuate depending on RBI's rate change policy. Well for ICICI floating means only upward revision. I received a rate of 7.5% in Jan. That was increased to 13.5% as of Jul. Acceptable because RBI kept on increasing the CRR and the Repo rates. In the past 2-3 months RBI has reduced the CRR and Repo rates by around 3-4%. Every PSU banks including some Pvt banks like HDFC bank announced a reduction in their PLR for existing customers. But ICICI has not reduced the rate for its existing customers at all. Instead I was shocked to hear that ICICI offered a lower rates for new customers but not existing customers. When I asked ICICI bank about this they plainly said that there is no downward revision in the rates. When I showed a TOI article about this rate cut for new customers this is what they wrote me
1. We would like to inform you that, you can decrease your Home Loan rate of interest by paying the conversion charges.
2. Process to convert from Floating to Floating Rate of Interest:
You can convert your Rate of Interest from Floating Rate to Floating rate of interest..
What we are offering to you is the additional benefit, where you can reduce your rate of interest Floating to Floating.
According to the confirmation from the department concerned, regarding the conversion of Rate of Interest, the applicable fee is Rs.0.5% on the outstanding principal plus a service tax of 12.36% on the same.
However the Conversion Charges are subject to the changes according to the Bank's discretion.
So now to avail the benefit of a lower interest rate I now have to pay a conversion charge where as this should have been my right under floating rate. Please check the following websites where people like me have expressed similar frustration.
http://economictimes.indiatimes.com/opinions/3801262.cms
Also read my personal review on ICICI Home finance
http://www.mouthshut.com/review/ICICI_Home_Finance-125248-1.html
Can anything be done against this?
--Venkat
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