The following brief article highlights the Monopolistic, Restrictive, Unethical and Unfair business practices (in short ‘CHEATING’) followed by ICICI Bank.

You may want to publish this article and expose the fraudulent practices of this Bank, and also help other home loan borrowers get alert, or way to get out who have been already cheated.

This is purely based on my own experience, and there are thousands of others you will find suffering. Just taking a glance at http://www.arjunprabhu.com/blog/archives/2005/04/27/icici-bank-a-bad-experience-for-many/ and http://www.mouthshut.com/product-reviews/ICICI_Bank-925004492.html will give you an idea of how good or bad the bank is.

Contents: Brief Summary, Series of Events, RBI orders and my losses, Summary of Modus Operandi

1. Brief summary:

a. ICICI ‘cheats’ home loan customers. This article summarizes the modus operandi.

b. ICICI does not resolve customer complaints, even if escalated to highest levels and regulators. Proves that the ‘errors’ were intentional to cheat customers.

c. ICICI does not obey orders from Reserve Bank of India (BO order copy http://www.geocities.com/pparag/bo-award.pdf ), and has no fear of MRTPC and Consumer courts. ICICI also provides false information to RBI

d. ICICI threatens customers of dire consequences if it’s fraudulent practices are exposed.

2. Description / Series of Events:

a. ICICI approached me in July 2004 to refinance my HDFC Home Loan, and offered me a ROI 0.5% below HDFC, several freebies, promises of simplified documentation, quick processing and no foreclosure penalties, making the overall deal look attractive. With some reluctance, I fell for the ICICI’s agent’s marketing tactics, and made the biggest mistake of my life.

b. I signed ICICI’s floating rate home loan application form (always believed that you can trust Banks until then), and a few other documents related to HDFC loan, and paid the processing fee. I received the loan sanction letter in a few days. ICICI promised me of direct disbursement to HDFC before July 31^st 2004 to start the new month clean without Pre-EMI interest.

c. For the next few days, ICICI kept bugging me for more documentation on income, property, existing loan, employer, family, references, EMI cheques etc, and I submitted them all. Later ICICI also forced me to get my wife sign as co-borrower, got a blank loan agreement signed by me and my wife effective July 31^st 2004.

d. I realised that ICICI did not disburse the loan on July 31^st as promised. ICICI DSA kept promising a new date for disbursement every day when I contacted. Finally, he informed me that I will have to personally settle the matters with HDFC due to delayed disbursement.

e. I cancelled my visit to home town to settle the matters with HDFC and ICICI, paid them interest for Aug to avoid Aug EMI to be encashed, and closed my loan account.

f. For the next few weeks, I thought everything is smooth, when I realized that the home loan rates in market have crashed to 6.75 and 7% (offers to my company employees), while I was paying higher. I wrote a series of letters to ICICI to requesting the corrections for delayed disbursement and lower interest rates, no responses.

g. EMI was debited from my salary account every month, gap between interest rates to my account vs market rates kept increasing. When my complaints to ICICI did not bear any fruits, I decided to re-finance my loan.

h. I approached HSBC for the ‘smart loan’, they happily did all the paperwork (simple), just to later inform me that as per CIBIL records, I have defaulted on my home loan and have several overdue charges with ICICI loan, and rejected my loan application.

i. To my shock, I approached ICICI Bank again to clarify and get the copy of false CIBIL report filed by them, no response! I studied the A/C statement that HSBC collected from ICICI (how come ICICI give my A/C statement to third party without my permission or knowledge?) to find that ICICI had charged me ‘Overdue charges’ every month, no explanations. It did show EMI credits every month, and shockingly, ICICI had charged interest from July 1, 2004 against a loan disbursed on Aug 3^rd.

j. Sick with the ICICI Bank, I made another attempt with another bank (happen to be my employer’s global account) for re-financing my loan at 6.75% fixed ROI for 3 years, I approached ICICI to foreclose my account, and ICICI refused to foreclose loan, asked me to pay 2% of outstanding loan as penalty before any details can be shared. Shocked, I again wrote complaints, citing the clause on sanction letter about zero foreclosure penalty. No explanation from ICICI, really frustrating. In the meanwhile, the new bank’s offer lapsed and the market interest rates had started increasing.

k. I wrote several complaints to ICICI, talked to several people in their branches and contact center, and personally delivered complaint to Mr. KV Kamath’s (CEO) office. Absolute waste of time, my complaints were still unresolved! I even sent a legal notice to file consumer complaint, no response!

l. Finally, I lodged a complaint with the Banking Ombudsman on Jan 13, 2006, who after carrying out extensive inquiry and submission of the documentary evidences, passed an order in my favor. The BO instructed ICICI to refund the interest charged before disbursement, reverse all the overdue charges as I had already deposited all the PDCs in time, correct my account statements and asked for explanations from ICICI on several of ICICI’s false claims/declarations. Since ICICI refused to pass on lower interest benefits to me, Hon BO finally passed an order (Order BO(M&G)/956/ST/07-08 dated Sept 6, 2007) that ICICI should refund me the excess interest it charged over the other customers.

m. In the meanwhile, ICICI tampered one of my EMI cheque, just to get it dishonored and to use their well-known Goons to recover the EMI from me forecefully by physically abusing. Luckily, even before ICICI could use any force, I deposited the EMI from same account, and asked for my original cheque to be returned. They have not returned my bounced cheque as yet.

n. ICICI threatened me of dire consequences if I disclose any details of the complaint and BO’s order to press or on websites.

o. RBI tried re-conciliation between ICICI and complainant. ICICI asked me to sign an unconditional ‘Non Disclosure Agreement’ which would prevent me to share any details on complaints or settlement with anyone including RBI, MRTPC, Consumer courts, press and other forums, as a out-of-court settlement, without any compensation or commitment to refunding my own money. I was warned of dire consequences if I talk about the case anywhere. I refused to sign the agreement without my money being refunded first.

3. RBI Orders:

a. RBI had passed an order (Order BO(M&G)/956/ST/07-08 dated Sept 6, 2007 http://www.geocities.com/pparag/bo-award.pdf)  to ICICI asking them to refund my money. The same was also upheld by the Hon Dy Governor of RBI and Appellate Authority (CSD.BOS/5986/13.23.01/07-08 Order #15), later after an appeal against the BO’s Award.

b. ICICI re-computed the statements with arbitrary rates of interest, on any random dates, so as to effectively nullify the amount it had to refund back to complainant. It sent out a pre-dated cheque with just a part of amount payable (Rs. 27754 K instead of Rs. 82935, as difference in interest only), and with an incorrect computation, effectively dishonoring the BO/RBI’s orders. No compensation for my costs incurred on my visits to their offices, complaints, follows or 5+ years of mental harassment. Not even a simple apology letter.

c. Effectively ICICI did not honor the BO, Appellate Authority/Dy. Governor’s orders until the 30 day period provided by RBI under the BO-2006 scheme.

My own losses are over Rs. 1.6 lakhs (extra interest, plus direct losses and costs related to complaints and visiting ICICI/BO’s office etc). This is in addition to over 5 years of mental harassment by ICICI to me and my wife.

Although I have been warned of dire consequences by ICICI if I publish the truth, and make the details of my complaints, evidences and the RBI orders public, I still request your help to alert the consumers and your readers/viewers, and bring the truth in front of everyone.

If you uncover these facts, this will certainly benefit a huge number of home loan borrowers, and will also help curtail several unethical practices by these institutions in India . The amount of refunds might run into thousands of Crores.

4. SUMMARY – MODUS OPERANDI:

1. ICICI Bank starts charging interest on ‘loans’ even before disbursing loan.
2. ICICI tampered my post dated EMI cheque
3. Unethically, and illegally, ICICI adopts two separate means for increasing and decreasing ROIs, although the ‘PLR’ only should be used (per RBI) as benchmark rate for any net rate of interest (ROI) changes. Uses PLR for increase (applied to all customers), and uses a constant ‘Margin’ for reducing to new customers only. This discriminatory treatment is unethical, restrictive, and unfair, which continuously penalizes borrowers throughout their life.
4. Adopted multiple ‘PLR’ benchmark rates for same floating rate loan product. Introduces new and phases out old ‘PLR’ names to mislead borrowers and continue the illegal practice forever for using different means for increasing or decreasing floating ROI.
5. Illegally slaps penalties on borrowers for own delay in presenting post-dated EMI cheques with clearance houses
6. Forces a borrower to get a co-borrower to sign a loan agreement, even without a registered ownership in property to be mortgage.
7. Puts undocumented arbitrary conditions and/or slaps penalties for foreclosure, part-payment, re-finance, change in EMIs etc, and resists early foreclosure by asking unreasonable and irrelevant documentation, and other restrictive mechanisms for locking the customer permanently in, disallows any re-financing at market rates from any institutions.
8. Forces one-sided amends to loan agreements on any change requests, forces borrowers to sign blank agreements.
9. No account statements sent to borrowers despite charging advance fees. If demanded at their branch, issues incorrect statements to customers, and also charges the customer for the same. Deficiency in services.
10. Sells confidential data about borrowers to third parties without borrower’s consent, for commercial and other gains: unfair and unethical practice
11. Suspected false reporting to CIBIL on borrower’s loan repayment records, and inability to provide any records on demand. Monopolistic and restrictive practices
12. False promises on free property/personal insurance, no policy is ever provided to borrower. Many other false promises at the time of selling
13. Not responding to customer complaints. Giving false assurances that they will respond in few days when escalated to outside agencies etc. Deficient services.
14. Demands post-dated-cheques via letters, however when provided, does not accept them at random, forcing borrowers to make painful visits and waiting at branch every month until loan closure. Also demands PDCs despite having provided the same, and receipt obtained.
15. ICICI does not comply with Banking Ombudsman or Banking regulator’s orders/directives.

- Parag

Parag Palsapure

Navi Mumbai, India

RBI Order