Interest Rate, ECS Failure and Deduction of bounce charges
I have taken car loan from Kotak Mahindra bank and from the beginning it has been very bad experience as the representative quoted some rate of interest and it was 2% more when the agreement was sent to me. The representative got the agreement papers signed without filling any information about rate of interest that will be effective and after getting signed by me whatever he told before signing was different from after getting the agreement signed. He says that they have around 4% of margin of rate of interest to be loaded as per process they use to follow. I wanted them to cancel the agreement as there is difference in rate of interest as mentioned before signing the agreement and after signing the agreement. They told some stories as it is common thing and I was getting into loss of around Rs.15000/- and I just wanted to cancel the agreement, but the representative of Mitra Agency where I bought the car and the bank representative and the managers finally decided to give some more discount to me and after that discount I was in a loss of around Rs.8500/-, I still wanted to cancel the agreement and I keep on communicating to higher officials of Kotak bank about whatever is happening. Then the bank representative came forward and agreed to pay Rs.7500/- and he wanted to pay that money in two installments, He paid Rs.5000/- as the first installment and he said he will pay the remaining 2500/- next month. It is almost 6months and he never came back to pay the remaining 2500/- till date. Meanwhile I started paying the EMIs and waiting for him to pay back the remaining 2500/-
About ECS Clearance:
Every month on 5th I have given standing instructions for the EMI payment. On 4th Feb 2009 I transferred the money to the account from which I used to pay the EMI via ECS clearance. The money got credited to my account on 5th February 2009 and I thought the EMI will get cleared. But after 2 or 3 days, I got a call from Kotak bank rep saying the EMI is due and ECS was failed because of insufficient funds. I was confused and asked him why would the ECS fail if the money is available in my account on 5th. He says ECS will be process any time starting from 4th midnight -means beginning of 5th and in the early hours the bank needs to give some statement to RBI so they process the ECS by 8am every morning. If the money is not in the account by that time ECS will fail and bounce charges will be debited from the account on which ECS is failed. One of the representative also adds that entire world is following the same procedure and I am not the one person get out of it. ICICI, HSBC and HDFC are also doing the same as mentioned by Kotak customer care person.
This is absolutely ridiculous and the banks are making money out of their inefficient way to clearing the funds. ECS is inefficient because if they can procss ECS at 8am every day there will be lot of failures and as most of the people either forget to transfer or deposit the money in advance or it is not the banking hours during which the customer may deposit the money for getting cleared for any EMI or such payments. The representative says that RBI rules are like that and they are bound to follow those rules. If such rules are imposed by RBI then it is not correct and RBI itself need to update such rules creating unusual income for the banks by misusing the Standing Instructions by the bank processing them inadvertently causing loss to the customers.
ECS is electronic clearance and no personal intervention is required as such. This can be set to process any failed requests to be processed again till the end of the day that the account is supposed to be cleared as per the customer's consent. If the account doesn't have funds from midnight of 4th i.e.starting of 5th day and midnight of 5th i.e.end of 5th, meanwhile if any ECS fails that should be processed again periodically till end of the day and then it needs to declare that it is failed citing the reason "Insufficient Funds". Kotak bank have debited my account for Rs.500/- towards bounce charges but the account has funds on 5th.
Can someone let me know what needs to be done in such cases?
Thanks & Regards