Please comment bank collecting 6% as foreclosure charges, interest rate 18%, pl read contetns
firstname.lastname@example.org Aug 4
Dear Mr. J.S.Shinde,
This reply is with reference to your mail dated 27th July 2015, in this regard we thank you for writing your concerns to us. As per our records your contract has run for 4 months only. As per the terms and conditions entered by you in the agreement foreclosure charges are applicable and we will not be able to offer waiver in the foreclosure charges. However as an exceptional case considering your track and relationship with us we are offering a waiver of Rs 5,000/- in foreclosure charges. We confirm you that Rs 11,67,254/- is outstanding towards foreclosure amount as on today. Please note that Rs 512/- is collectable towards per day interest. Breakup of the foreclosure amount is given below for your reference.
Foreclosure Amount Receivable / Payable
Principal Outstanding as on 03-AUG-15
Prepayment Interest (5.21% on Principal Outstanding + Service Tax )
Revenue for broken period
Overdue Interest Receivable
Foreclosure Receivables /Payables
Thanks & Regards
T. Bala Kameshwari
Customer Service Manager more
The bank has also been directed to refund Rs 2,71,289.45, which they charged as foreclosure charges in addition to Rs 5,000 towards costs of litigation.
The complainant, Sanjay Kumar Garg, was disbursed a home loan of Rs 1.30 crore, which was to be paid back in 120 monthly installments of Rs 1,74,813 each, with a floating rate of interest at 9 per cent per annum.
The complainant averred that he paid 33 installments up to July 31, 2008 and then wrote a letter to the bank seeking details of the exact balance left to be paid.
He was asked to deposit Rs 1,24,62,655.28, including Rs1,20,93,55 as principal outstanding amount, Rs 97,000 as interest up to July, 2008, and Rs 2,72,104.88 as foreclosure charges at the rate of 2.25 per cent.
He requested to waive off the foreclosure charges, but to no avail. The loan account was finally closed when the complainant paid Rs 1.25 crore.
In its reply, ICICI Bank said the foreclosure and pre-payment charges were accounted for according to the terms and conditions of the loan.
Ruling that "foreclosure" and "pre-payment" are not interchangeable words, the forum said the counsel for ICICI could not produce any agreement under which the complainant was liable to pay the said charges.
"There is no agreement for paying any fee or charges in case of foreclosure. The bank asked for foreclosure charges, which is beyond the terms of the agreement," held the forum. more