[Resolved]  HDFC Bank — ABNORMAL HIKE IN RATE OF INTERST WITHOUT LINKING IT TO BANKS PLR

Dear Sir/Madam,

I had availed a HL OD facility having account number [protected] with Centurion Bank of Punjab Ltd for an amount of INR 13.5 Lacs, which was given to me at a commercial interest rate of 8.5% for a period of 60 Months. I had an option to avail this facility at a Staff or HR loan rate of interest of 3.5% since being employed with CBoP yet I had decided to avail it at a commercial rate of interest of 8.5%. After the merger of CBOP with HDFC, there has been no communication on the new interest rates on an official basis to me by HDFC bank, but I am given to understand now that the bank has arbitrarily changed the interest rate on this facility. .

After rigorous follow ups from my end fortunately today I have received an email communication from HDFC Bank for the revised rate of interest. It mentions that:

“HDFC Bank has revised the Prime Lending Rate (PLR) from 16.00% to 16.50% effective November 1, 2008. Since the pricing of your Overdraft facility is linked to Prime Lending Rate, the lending rate for your Overdraft facility would be revised to 14.5”

I would like to get a very clear reply from HDFC bank on this, with explanations for the below:

When the PLR of HDFC Bank has been revised from 16% to 16.5% effective 1st Nov 08 and since the pricing of my OD facility is linked to PLR my rate or interest should have got hiked proportionately by 50 bps from 8.5% to 9%, so what is the basis for this whooping hike of 600 bps in my rate of interest from 8.5% to 14.5% when the PLR of HDFC bank itself has got hiked only by 50 bps and my pricing of OD facility has to be linked with PLR as per the communication received today from HDFC Bank?

Further the PLR has been reduced from 16.5% to 15.75% till date but the effect has not been passed on to my account. How can HDFC Bank hike up my HL OD rate of interest abruptly upon 50bps hike in its PLR and then not reduce the rate of interest with a reduction of 75bps in its PLR thereafter while not forgetting to state that “HDFC Bank has revised the Prime Lending Rate (PLR) from 16.00% to 16.50% effective November 1, 2008. Since the pricing of your Overdraft facility is linked to Prime Lending Rate, the lending rate for your Overdraft facility would be revised to 14.5” while hiking my ROI.


If the rates have been hiked, why has no communication been made officially to me? If the bank claims that an official communication has been made, I would like to see the POD, of the communication? The address where bank claims it has made a communication itself is wrong as my residence address is my communication address on which I have been getting communication for my other loan accounts as well held with HDFC Bank.

Why has my consent not been taken with respect to any rate hike, as per RBI guidelines which makes it mandatory for a bank to communicate any change in the rate of interest to the customer atleast a month before such a change is made, so that the customer has the option of either continuing or shifting to another financial provider?

I have been asking for these details for quite some time now but the concerned officials did not seem to have any idea, or they deliberately did not want to give me any details?

I would also like to know the current PLR of the bank and what is the basis of hike in interest rate based upon when as per the communication from HDFC bank themselves pricing of my OD facility is linked to banks PLR?

I would also wish to know whether this is a deliberate attempt by the bank to harass CBoP customers, by not sharing any communication with them and hiking the rate of interest of eCBOP customers abruptly so as to earn additional interest revenue on eCBOP portfolio.

Further it has come to notice that HDFC Bank has revised the ROI to 14.5% without linking it to their PLR hike of 50 bps for all customers who had availed an OD facility from eCBOP irrespective of the fact that their rate of interest with eCBOP was ranging from 8% to 13.5% for this product depending upon the customers credit score which please note. With reduction in PLR the effect has not been passed on to any of the eCBOP customers including me.

If any arbitrary action of the bank leads to my financial condition being compromised, or I having to undertake any kind of mental trauma, I will clearly hold the bank responsible.

I have been remitting the interest at 8.5% for this OD account promptly till date in last 18 months as agreed and accepted vide sanction letter dated 7th Jan 08 from CBOP so there should also not be any attempt by the bank to declare me a defaulter.

Request your intervention to get this issue resolved at the earliest.

Thanking You,

Warm Regards,

Swanand Phand,
(M)-[protected]