Legal Question in Banking Law in India

Revision on HomeLoan Interest:

Dear LawGuru;

I have taken Home Loan in September 2003 with a floating starting Interest of 8.0%. The interest rate has been revised atleast 5 times sincethen.

I have received a letter communicting the revision of interest rate from 10.75% to 12.25% effective April 01, 2007.

On oneside the FM keeps issuing guidelines / advisces not increase the home-loan interest for Home Loan existing customers.. Largest bank like SBI has anounced that the intesrest will be revised to an average 0f 0.75% to personal loan category excepting home-loans & educational loans. It looks like some banks listen to Govt. advise/suggestions & a few other banks like my Bank increases by an abnormal 1.5 % in one go.

My questin is: Is there a way to discuss with some regularotary bodies linked to banking issues & to get some justice.

In fact today's TOI, bangalore edition, HomeLoan Interest table indicates the hist (Fixed-rate) of SBI is 10.75 while all other bank's interesr % seems to be less than 10% for both Floating & Fixed type of loans.

Is there a way to deal with this issue & to paya reasonable interest only & to request formally the bank in question to be reasonable?

Your suggestion / help will be appriciated.

M.V. Sathyanarayan


Asked on 3/09/07, 12:36 am

3 Answers from Attorneys
G. M. Gupta gmguptaandassociates

Re: Revision on HomeLoan Interest:

besides the options given by other lawyers you can pay the amount at one go to your current bank and take the loan from other bank

Read more
Answered on 3/10/07, 6:55 am
J. Radhakrishnan independent Practice

Re: Revision on HomeLoan Interest:

Unfortunately, you have signed the agreement which provides, that the Bank is at liberty rather has the right to revise rate of interest from time to time during the subsistence of the loan. Floating rate of interest is by nature susceptible to change and especially in loans from banks it has only an upward movement rather then going down. The best you can do is to request the Bank to consider the undue burden on small borrowers like you and not to chain you to the small print in the loan document. You can also write to Indian Banks Association, RBI about the plight of home loan borrowers. If nothing good turns up, you can try a complaint to Banking Ombudsman. I am sceptical about any good out come from him also as he would blame you for the mess in signing on the dotted line.

Read more
Answered on 3/09/07, 6:11 am

Re: Revision on HomeLoan Interest:

Sir, In case of floating interest as per the agreement signed by you bank gets power to

revise interest keeping in view the increase or fall

in the interest rate fixed/CHARGED by the RBI on

deposits of the banks. If you feel that the act of

bank is unreasonable then you may lodge your complaint

before MRTP Commission and also in consumer court.You may also write to RBI.

thanks.

Read more
Answered on 3/09/07, 11:21 am


Related Questions & Answers

More Banking Law questions and answers in India