Yes Bank — Mortgage loan interest deduction before loan disbursement - discrepancies

Address:

411015

To
The Country Head – Retail Assets
YES Bank
Subject: Loan EMI deduction before disbursement of loan - Interest rates applicable from February 2017 for a loan which is not yet disbursed till date in March 2017 – Interest without disbursing the loan is deducted from Account – Please take immediate corrective action – Bandarkar Branch, Pune
Ref: Loan No. MOR[protected] Loan Not disbursed yet – but date of disbursement 30/01/2017 is sent in a document – Interest Account started from 01 February 2017.

Sir,
I am D.Muthuraj, working as Senior Scientist in Defence R&D Organisation(DRDO) and my wife Mrs. Vasuki Muthuraj is the proprietor of a pre-school in Pune.
We have applied loan against property with your YES Bank, Bandarkar Road Branch, Pune. Loan No.MOR[protected]. We have applied through a local DSA, who had brought Sh.Rohan of your YES Bank Representative, Bandarkar Road Branch, Pune for the discussions. I discussed the various options for direct loan from your YES Bank and also for balance transfer from other loans as we were having some free property and some existing loans from other financial institution. We were earlier having a mortgage loan(Rs52, 00, 000/-) with Shriram City Union Finance Pvt. Ltd, Pune, so I told him the details of the above loan and my plan of foreclosing the loan and brining to YES bank, as the rate of interest promised me for 10.5%.
Your representative explained me that there is no difference in both the case, and asked me to first apply for loan against mortgage. He also added that before the disbursement of loan, the balance transfer or direct loan amount transfer to me or my wfie’s account can be decided, the procedure is same from Bank’s point of view.
So, we have applied in December 2016, and in the mean time I was talking to Shriram Finance about the fore closing process. But they advised me to close the loan directly if possible, because the balance transfer from other financial institution will attract 2% additional prepayment charges and service charges, which was working around Rs.1, 15, 000/- for my case(Rs 53, 00, 000 lakh outstanding).
So, I have arranged my own funds, also through my friends and relatives to save that Rs. 1, 15, 000/- so as to close the loan of Shriram financed balance loan on 31 January 2017.
While doing the process of loan from YES Bank, in the first week of January 2017, I told your YES Bank Representative, that we are planning to close the Shriram Finance loan from our own funds, and requested him to give the final disbursement on my name/wife’s name after receiving the documents from Shriram Finance. As per Shriram Finance, my documents alongwith the release deed documents will be reaching after 25 to 30 days after closing the loan.
Considering the above I requested your YES Bank Rep. Sh.Rohan to arrange my loan in February end or for March 2017 disbursement. But he was insisting me to pay the processing fee charges(Rs.59, 000/-) in January 2017 as the application was processed in the month of January 2017. The disbursement will happen after receiving the documents, and the EMIs will start after the disbursement, i.e after March 2017 or April 2017. So, I also paid the processing fee in January 2017.
I received the documents from Shriram finance yesterday, and I was planning to give the documents in two days to your YES bank i.e. my loan may be disbursed on the same day or after that. From that day my interest will be applicable, So my pre EMI or EMI cycle will start in 31 March 2017 and from April 2017 onwards my EMIs will be regular.
Today I received a call from your customer care, Mumbai phone no.[protected], saying that I should keep enough balance in our account, as the preEMI and EMI are going to start in March 2017. I was shocked to hear this. I explained them that my loan disbursement was not done, then asked them when the loan is not disbursed in my account, then how will be the preEMI or EMI start? So, please register a feedback/complaint and do not send my ECS request form or my cheques to my account.
I called your YES Bank Rep. Sh.Rohan, who processed my loan application, about the phone call discussions with[protected]. I further asked him to stop the preEMI cheque if any, as there is no funds in my account. I also conveyed him that my Interest & EMI should start after I get loan amount in my account.
But his discussion and the points were not convincing and healthy with me. He conveyed me that the loan interest is applicable from 1st February 2017, as the case was initially discussed the options for Balance Transfer from Shriram Finance and processing fee was paid in January 2017. Based on that the Demand Draft has been prepared on Shriram City Finance, so I have to pay the interest from 1st February 2017.
Sir, till today I have not submitted my documents to YES Bank, and not submitted any loan closure documents from Shriram to your YES Bank. Without that how the DD can be prepared on Shriram finance’s name?. Even it is disbursed on Shriram Finance, It should be with my permission. When I closed the loan on 30th January 2017, how the DD an be prepared on Shriram’s name after that?
Moreover, I have explained my loan closure from my own funds in January, and arranged the funds from 1st January 2017, regularly in touch with your Rep. and intimated the plan of loan fore closure in January 2017 (January 2017 first week itself). So, the necessity of making DD on Shriram finance does not arise here.
As per his discussions in December2016/January2017, the disbursement of money in our account or Shriram Finance account does not have any difference, so the application procedure remains same. Since the application was process started in January I paid the processing fee in advance. i.e. for the loan disburse in March 2017, I paid my processing fee in advance in January 2017, which is valid for February/March 2017 disbursement cases . But that does not mean my EMI is starting from February 2017.
Our application was in process, in December/January 2017. In January 2017, I closed the loan of Shriram financed balance loan on 30 January 2017. But your YES Rep is telling me that DD prepared in January 2017 in the name of SHriram Finance, which is not known to me. So, I have to pay interest from 01 February 2017.
This is the first time I have applied to your Bank with lot of hope, but the sequence of incidents making me to feel that your Reps, are just trying to take the business from other institutions or new customers by hiding many important informations, which is damaging the financials of customers and mainly the hope of the growing banks like yours.
Since we have trust and belief on Banks like yours, and their Reps, we sign the agreement and other documents in blank conditions, that shows our attitude to have a permanent relationship for lon term like 15 to 20 years.
But the misunderstanding or hidden information approach some times hurt the customers, so after doing the business, Reps and Banks should take care of the finance of the customer even upto last Ten Rupees.
So, I request you to take necessary actions to correct the above inconveniences. My interest rate should start after I get my disbursement (probably next wek). If not possible, please refund the processing fee amount (Rs.59, 000/-). So that I can apply through other Banks/Financial Institutions or go for further legal steps.
Yours Sincerely,
D.Muthuraj, Scientist”F”
Joint Director
High Energy Material Research Lab.(HEMRL)
Defence R&D Organisation (DRDO
Pune
Mob - [protected]
e-mail: [protected]@gmail.com