ICICI Bank country’s largest private sector lender has added a new clause in the credit card ‘terms and conditions’ for the recovery of dues from credit card customers. The new credit card terms and conditions after the inclusion of new clause have come into effect from July 23, 2009. Soon other banks are expected to adopt this new tool. By adopting this new tool the banks in order to recover dues from credit card customers can ask the employers to deduct the outstanding amount from the salary.
According to the new clause the employees who have defaulted on payment cannot object on the deduction of dues. These deductions will be passed to the bank and will continue till the entire amount is recovered.
After the inclusion of the new clause the ‘terms and conditions’ say that "no law or contract" governing either the card holder or employers can prevent the bank from carrying out such deduction and subsequent payment by the employer to the bank.
The ICICI Bank spokesperson has confirmed the introduction of the new clause. The spokesperson told the reporter, "This clause is applicable only for customers who default on their credit card payments. Prior notice has already been sent to all our customers to make them aware of this clause".
He stated, "Only the defaulters in repayment need to be concerned and it is not of concern to regular customers".
With the inclusion of this clause, ICICI Bank is now "entitled and authorized to contact and require the card holder's/card member's employers to make deduction/s from the salary/wages payable by the employer to the card holder/card member and to remit the same to ICICI Bank until all of the card holder/card member dues outstanding from the card holder/card member to ICICI Bank is/are completely discharged."
In addition to this according to the new clause, bank will have the right to decide upon the quantum of the deduction.
The revised terms and conditions of the bank specify, "The deductions shall be of such amounts, and to such extent, as ICICI Bank may communicate to (and instruct) the card holder's/card member's employers".
It further adds, "The card holder/card member shall not have, or raise/ create any objections to such deductions. No law or contract governing the card holder/card member and/or the card holder's/card member's employer prevents or restricts in any manner the aforesaid right of ICICI Bank to require such deduction and payment by the card holder's/card member's employer to ICICI Bank".
Friday, July 31, 2009
Thursday, July 9, 2009
ICICI bank to pay Rs 1 lakh for enhancing interest rate of home loan
In a judgment given by the consumer forum on the complaint filed by the Panchkula resident Birbhan Goyal, said the increase in the rate of interest in case of home loan is unlawful and unjustifiable. The forum imposed a penalty of Rs one lakh, which the bank will have to pay to Goyal, and said, “The bank is directed to overhaul accounts of all its loanees and bring the rate of interest at par with those at which the loan (home) is advanced to new customers from time to time, so that all its customers, whether old or new, who have opted for adjustable rate of interest pay the same rate of interest during any particular period.”
In its decision the forum headed by Jagroop Singh Mahal stated the finance company and the bank have adopted unfair trade practice. The forum held, “Whenever enhancement takes place, the rate would not be more than that at which loans are being advanced to new customers, meaning thereby that if after enhancement, loan is advanced to any new customer at a lower rate, the rate of interest of the complainant and all other loanees would also come down to the same level.”
Goyal completed all formalities required to get a loan signed an agreement with a home finance company and the bank. On this a loan of Rs 37 lakh was sanctioned which was to be paid in 180 installments in a period of 15 years, and thereafter he started paying the installments from March 2005 onwards on a regular basis. However in August 2008 he received a letter, on reading he was surprised as it stated that the repayment schedule through EMIs was being revised to increase the repayment time from 180 to 502 months. On reading this he immediately contacted the bank’s local branch and requested for the cancellation of the payment rescheduling but bank did not conceded to his request.
ICICI Home Finance Company Ltd and ICICI Bank Limited while denying the allegations, in their written reply appealed that the complainant had opted for floating rate of interest and due to increase in it, they had increased the tenure of repayment of monthly installments in order to reduce the financial burden on Goyal.In his argument Goyal’s counsel before the forum stated that the finance company and bank have adopted unfair trade practice by increasing rate of interest for old customers at a higher rate, while the current rate of interest was much lower, which was illustrated through their announcements and advertisements in the newspaper to attract new customers. After hearing the pleas, of both the parties the forum held that the interest rate of any old borrower would be lowered to bring it at same level with the interest rate at which the loan is being offered by the bank to its new customers.
In its decision the forum headed by Jagroop Singh Mahal stated the finance company and the bank have adopted unfair trade practice. The forum held, “Whenever enhancement takes place, the rate would not be more than that at which loans are being advanced to new customers, meaning thereby that if after enhancement, loan is advanced to any new customer at a lower rate, the rate of interest of the complainant and all other loanees would also come down to the same level.”
Goyal completed all formalities required to get a loan signed an agreement with a home finance company and the bank. On this a loan of Rs 37 lakh was sanctioned which was to be paid in 180 installments in a period of 15 years, and thereafter he started paying the installments from March 2005 onwards on a regular basis. However in August 2008 he received a letter, on reading he was surprised as it stated that the repayment schedule through EMIs was being revised to increase the repayment time from 180 to 502 months. On reading this he immediately contacted the bank’s local branch and requested for the cancellation of the payment rescheduling but bank did not conceded to his request.
ICICI Home Finance Company Ltd and ICICI Bank Limited while denying the allegations, in their written reply appealed that the complainant had opted for floating rate of interest and due to increase in it, they had increased the tenure of repayment of monthly installments in order to reduce the financial burden on Goyal.In his argument Goyal’s counsel before the forum stated that the finance company and bank have adopted unfair trade practice by increasing rate of interest for old customers at a higher rate, while the current rate of interest was much lower, which was illustrated through their announcements and advertisements in the newspaper to attract new customers. After hearing the pleas, of both the parties the forum held that the interest rate of any old borrower would be lowered to bring it at same level with the interest rate at which the loan is being offered by the bank to its new customers.
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