[Resolved]  ICICI Bank Home Loan — Borrow from this bank to get AIDS!

This is about Monopolistic, Restrictive, Unethical and Unfair business practices (in short ‘cheating’?) followed by ICICI Bank. This is purely based on my own experience, and that I have already escalated these issues with Banking Ombudsman, RBI, CORE, and MRTPC.

In fact, the Banking Ombudsman even passed an award in my favor [BO(M&G)/COMP-956/ST/07-08 dated Sep 6, 2007] against ICICI Bank after 2.5 years of extensive investigation and documentary evidence provided in my complaints. ICICI Bank refused to honor the BO’s order, and the case is pending appeal with RBI’s Appellate Authority since last ~6 months. I was told that ICICI did not even respond to Banking Ombudsman’s office many times, or met any deadlines to respond.

After refusing to refund me my money, and when they saw my review/blog on www.mouthshut.com and www.arjunprabhu.com, ICICI ‘warned’ me of ‘dire consequences’, all in the Banking Ombudsman’s own office in Mumbai, for any future writing online reviews or to Press, and wanted me to sign an ‘Non Disclosure Agreement’ to keep a cover on all facts, plus ‘unconditionally revoke all my complaints with all forums, consumer courts, MRTPC’ etc, on the promise that ICICI will ‘consider’ refund of my dues in that case! If this can happen in BO’s office, don’t know what they would have done to me outside the RBI premises, as they had ‘invited’ me to their office to ‘settle’ my complaints permanently and ‘refund’ me my money. ICICI also talked about their strong ‘Defenses’ and ‘legal and financial strengths’ to fight their version.

My own losses are over Rs. 1.6 lakhs, a majority of which is the extra interest charged by ICICI bank, plus direct losses/costs related to followup of complaints and make visits to ICICI/BO’s office etc. This is in addition to the nearly 5 years of mental harassment by ICICI to me and my co-borrower wife (who has already undergone through extreme mental trauma, and had several miscarriages during that period, and for which no compensation is enough).

ICICI has all monopolistic, unfair, unethical and restrictive trade practices.

1. ICICI lures home loan customers with lower ROI (and promising freebies) under a particular reference “Prime Lending Rate”. Once they get the customer, ICICI starts arbitrarily increasing ROI/PLR, without any regards to RBI policy rates, market rates, or ROI offered to it’s own new customers. ROI reduction is not passed to existing customers even if the market rates fall on Floating Rate schemes.

2. ICICI uses different mechanisms for raising, and for reducing the Interest Rate (ROI) on home loans, although the ‘PLR’ is supposed to be used as the only benchmark rate and mechanism for all ROI changes. ICICI designed the system in such a way, that the borrower always pays increasingly higher rate of interest throughout the tenure of the loan, and borrowers are required to pay hefty penalties to ICICI bank on any foreclosure, part prepayment, or refinancing the loan, when they try to reduce the interest burden. ICICI, thus ensures that once they get a customer, it is locked with them throughout.

3. ICICI introduces new benchmark lending rate PLR (with a different name, just to show 'lower net ROI' to prospects, although the PLR serves the same purpose, for the same product). ICICI has multiple PLRs for same product/service, which is not permitted as per RBI. All the PLRs are increased in tandem over time. Thus, borrowers are required to increasingly higher net ROI over time, irrespective of market rates.

4. ICICI promises freebies (in writing, in advertisements) e.g. free personal insurance cover, free property insurance etc, however once the loan is availed, no insurance is provided, neither any policy is sent to the customers.

5. ICICI charges hefty penalties for loan foreclosure, prepayments etc. when the customer wants to prepay or close the loan due to high ROI. ICICI also charges the existing customers heavy fees for re-financing from other banks when the customer finds that the ROI charged by other banks are much lower than they are paying to ICICI. This is done despite sanction letter confirms that there will be zero prepayment and foreclosure penalty. Cant get a ‘foreclosure statement’ as proof, which can allow borrower to file any complaints. Foreclosure statements are issued only when the customer presents a cheque for foreclosure (balance principal + interest + foreclosure penalties + other applicable charges)

6. ICICI forces customers to pay ‘switch fees’ for reduction in ROI to market levels on Floating Rate Loans, although Floating rate loans are supposed to have reduction in ROI when the RBI policy rates, or markets interest rates fall. ICICI also introduces further one sided amendments in loan agreement during any requests for reducing ROI slightly (cant sync to market rates anyways), and forces customers to submit a signed stamp duty paid agreement with all fields (amounts, ROI etc) kept blank. However ICICI increases the ROI arbitrarily without any fees or agreement from customers.

7. ICICI presents (for clearance) post-dated EMI cheques late with clearing house, and charges penalty on customers for ICICI’s own delay, despite that the customers have submitted all the EMI PDCs with ICICI in advance, and that customer accounts have sufficient balance.

8. No quarterly/annual account statements are sent to the customers, although the admin fee is charged in advance by ICICI. ICICI also refuses to accept post dated cheques during the last year of loan, although no ICICI document provided to customer says so. In fact, the customer is requested for PDCs through a letter, however, when the customer deposits the PDCs, ICICI refuses to accept the PDCs, and customer has to visit the branch every month to deposit EMIs. This is plain harassment.

9. ICICI charges interest even without disbursing the loan. The interest is charged from loan sanction date, or loan agreement date, and not from actual disbursement of loan. Another unfair practice.

10. ICICI puts undocumented conditions such as part-prepayment to be done for change in EMI, arbitrary amount for minimum part-prepayment, puts limits on number of times part-prepayments can be made during loan tenure or calendar and financial year, and keeps these changing without customer consent or informing them. Since such things are not informed to the customer, customers find it very painful when they go for prepayments, and are turned back without accepting the prepayments or change in EMI stating arbitrary rules as above, which the customer is not prepared to pay on the spot. This is not only inconvenience to the customers, but customer is forced to keep paying higher interest due to such delays.

ICICI also charges undocumented fees/conditions under different heads exploiting grey areas - e.g. for swapping cheques fees when EMI is changed, switchover fees from floating to floating ROI within same product, and also from one product to another new product, part-prepayment and foreclosure penalties which are not initially informed/documented, ‘documentation fees’ for prepayment.


Several verbal promises made by agents (e.g. doorstep service, processing and disbursal on/before a promised date, simple documentation, single point of contact etc), however, the borrower finds that none of these promises are honored once the loan is availed.

11. ICICI has no respect for the customer or RBI/regulators. They will not honor any awards given by Banking Ombudsman. I guess this is also true for Courts, did anyone hear that the consumer got the amounts paid after the courts slapped fines on ICICI?

12. Demands post-dated-cheques, however when presented at branch, does not accept them during last year of loan tenure, forcing borrowers to make painful visits and waiting at branch every month until loan closure.

In my case, ICICI even fraudulently tampered my EMI cheque to show their strength.

Please be extra cautious while borrowing from this bank, or just avoid it altogether if you can. You will suffer a long-term pains for a short pleasure of quick processing. My friends call borrowing from ICICI is like contacting AIDS.

- Parag

Parag Palsapure
Navi Mumbai