ICICI Bank penalised for unfair trade practice

Tribune News Service

Chandigarh, April 21

The District Consumer Disputes Redressal Forum has directed ICICI Bank to reimburse Rs 9,78,643 charged in excess on a loan amount of Rs 16 lakh.

In a complaint, Ashwani Bhalla, a resident of Sector 38 (West), submitted that he had availed a loan of Rs 16 lakh from ICICI Bank against property and the term of loan was finalised as floating reference rate (FRR) at 10.25%, adjustable interest rate. The EMI of the loan was calculated at Rs 21,590 per month for a period of 120 months as per the agreed terms.

The complainant stated that from the first EMI onwards, the bank changed the agreed terms unilaterally by applying 11% rate of interest against the agreed 10.25%.

He claimed that the bank changed the rate of interest on the loan account from time to time unilaterally i.e. 11% in March 2017, 12% in April 2007, 13% in May and June 2008, 13.75% in July 2008 and 14.50% in August 2008. It was submitted that the bank kept on changing the rate of interest without any intimation and it was increased up to as high as 16% during September 2011.

As per the agreement, the loan tenure of 120 months was to be completed in January 2017. But due to illogical and illegal increase in rate of interest, the tenure period was extended to 194 months by keeping EMI amount unchanged.

In its reply, the bank stated that the complainant was time to time informed regarding an increase or decrease in interest rate, change in tenure and EMIs. However, the complainant in his rejoinder stated that the bank had never given him any intimation about the change of rate of interest. The bank had also levied Rs 12,157 (Rs 3,720 as conversion charges, Rs 5,000 as bounce charges and Rs 3,427 as late payment charges) on the loan amount.

After careful examination of evidence on record and pleadings by the parties, the forum observed that ICICI Bank had increased the rate of interest over and above the agreed rate of interest without any intimation or consent of the complainant and as such found to have indulged into unfair trade practice. As such all charges over and above 10.25% rate of interest imposed and collected by the bank are quashed being untenable and in violation of provisions of loan agreement.

ICICI Bank also failed to produce any document in proof of whether the enhanced rate of interest was compatible with the rate of interest as prevalent during the period in question or whether enhanced rate of interest as imposed was permissible under any guidelines of the Reserve Bank of India.

The complainant would have paid only Rs 25,90,800 (Rs 21,590 EMI in 120 instalments), but he actually paid Rs 39,11,608 i.e. excess amount of Rs 9,90,800 to the bank, which is not fair and required to be reimbursed to the complainant.

The forum directed bank to pay back Rs 9,78,643 (Rs 9,90,800-Rs 12,157) to the complainant within 30 days.