Parag’s Weblog

July 23, 2008

To,

The Head, Service Quality.

ICICI Bank Ltd, Mumbai

This refers to your letter dated July 21, 2008 (HL/MUM/07/14) in response to my acceptance of Banking Ombudsman’s award BO(M&G)/COMP956/ST/07-08, subsequent affirmation by Hon Dy Governor and Appellate Authority, RBI vide order CSD.BOS/5986/13.23.01/07-08.

1. Kindly note that the amount computed by you is not complying the BO’s award, which stated that ‘the net ROI applicable to borrower’s account should not higher than net ROI being offered to the customers linked to FRR’.
   1. Arbitrary application of dates: ICICI had launched the FRR in Jan 2004 as per your letter to the BO (Rate change history of PLR&FRR…), whereas your computation sheet is incorrectly applying the FRR changes from Jan 2005.
   2. Arbitrary application of net ROI: Floating Rate offered by ICICI on home loans was 11.25% in Sept 2007 (a copy of the letter was submitted to the BO’s office), while you have charged me an ROI of 12.5%, i.e. 1.25% higher net ROI. The re-computation is showing a reduction of only 0.5%, and not 1.25%.
   3. Incorrect computation: The computation provided by you is incorrect. The actual difference was exceeding Rs. 70,800 by Oct 2007, where the loan account should have closed, no interest charged thereafter.
2. Ignoring penal interest provisions: ICICI has also not complied with the 2^nd clause of the BO’s Award, which refers to reset cycles and other terms of the sanction letter. The sanction letter clearly refers the detailed terms and conditions including penal interest provisions in the Loan Agreement. ICICI should have also paid penal interest to me at 24% as per the loan agreement. The loan would have closed by Oct 2007, had ICICI applied correct net ROI.
3. Back dated cheque: You have sent a back-dated cheque of Rs. 27754 with a month’s validity from date of issue. The amount is also just a part of total amount payable. The standard cheque should be valid of 6 months.

Therefore, it is concluded that ICICI has applied arbitrary rate of interests and arbitrary dates while re-computing the net ROI, and provided a incorrect computation statement and a back dated cheque. Therefore, the BO’s Award has not been complied with.

I request you to kindly comply the BO’s award within the timelines provided by the BO and Appellate Authority and send the revised cheque ASAP

I have been complaining about ICICI’s deficient, unethical services for over 5 years now, and provided all the necessary documentation. My complaints were examined by RBI, and orders were issued for ICICI to refund my money. It is such a shame that despite RBI’s orders, ICICI continues to engage in such cheap practices.

It is time that the people and the regulators wake up, and stop the nonsense.

If the bank itself sets an example for cheating, monopolistic approaches, should the Bank expect people should not default on loans, or become cheats? Set an example yourself.

Thanking you,

- Parag

Parag Palsapure

Navi Mumbai

Cc: BO(M&G), Appellate Authority.