Hi,

I am Ganesh Pandurang Watve,

staying at 125 A, 3rd floor, Varad Apts, Nene Ghat, Pune- 411030

having home loan & top-up loan from ICICI Home Finance. I am not happy with
the ICICI home loan, top-up loan's current interest rates (FRR / PLR).

RBI reduced the Repo rate & so nationalized banks also reduced the FRR/PLR
(SBI's home loan interest rate 8% to 8.5%).
But private banks like ICICI are not reducing it proportionately (for me
currently ICICI's Home loan Interest rate is 13%, for top-up it is 14.75% &
FRR/PLR is 13.75%). But while increasing FRR / PLR, they are always ahead of
nationalized banks.

Four-Five yrs before, when I approached the ICICI bank for home loan,
Interest rate of ICICI (In May 2004, FRR/PLR of ICICI was 7.75% & with
-0.75% variance with FRR/PLR, I got the loan at 7.00% ROI) & Nationalized
bank was almost same (Nationalised banks were charging around 7.50% interest
rate). Now the difference between ROI in Nationalized banks & ICICI is
around 5% (13% - 8%). [The effect of the difference in ROI of Home Loans
between nationalized & ICICI bank for Rs. 10,00,000/- loan & the tenure of
20 yrs is Rs. 3,500/- per month .]

Currently, Bank rates of ICICI bank are different, for new / existing
customers. So without reducing FRR/PLR, they are reducing interest rate for
new customers (just to attract new customers) by giving more variance in
FRR/PLR with ROI. So they are charging ROI of 13% for existing customers &
around 9.75 for new customers. Not sure, whether this is cheating of
existing customers as per consumer laws / RBI regulations.

I taken floating interest rate option, under the impression that "Floating
Interest Rate" means the FRR/PLR is directly proportional with the RBI Repo
rate. ICICI, increases the FRR/PLR, immediately after increase in REPO,
but while reducing they are reluctant (just to fill their pockets with the
difference between FRR/PLR & Repo). Then what is meaning of "Floating
Interest Rate"? I think, it's cheating with the customers.

We, as a consumer, understand, if there is -


- minor dis-proportion of FRR/PLR of banks with RBI Repo Rate and

- minor difference of Interest rates in Nationalized & Private bank.

But when there is huge difference, we, as a consumer or as a common man,
become helpless. We feel that private banks like ICICI are cheating us. And
when there is recession and people have fear of job loss this is very
frustrating.

Transfer of loans to some other bank is one solution on this problem, but an
expensive one. For transfer, ICICI will charge 2% on the outstanding
principle, plus applicable service tax @12.36% on the foreclosure charges.
Then processing fees (0.5%) of the new bank is new burdon, though which is
acceptable. Since loan transfer is Prepayment of the loan (by taking loan
from other bank). Not only for loan transfer but even for Prepayment, ICICI
charge 2% on outstanding Amount. Not sure, whether charges on Full Payment /
Prepayment has any legal ground, because as per my knowledge, SBI is not
chanring anything for Pre-payment (But I am not sure).
In this way, ICICI has blocked all the roads of customers (loan transfer is
expensive, staying with ICICI is also expensive).

Note: Last week, ICICI came up with scheme for existing customers to reduce
the interest rate (making variance with FRR/PLR to 4%) by paying 0.5% of
outstanding amount & some other fees. By this scheme now status of existing
customer for home loan will be changed to new customer & he will get new
home loan account number. So bank is treating existing customer as a new
customer, by charging some amount. Just to reduce EMI burdon of my home
loan- though unwillingly- I opted for it, which may get effect in next
month. But scheme is not for top-up loan. So still having very high ROI for
top-up loan. Though I am not happy, in paying for such Home-Loan scheme, to
reduce the ROI; since RBI reduced the Repo and ICICI is supposed to transfer
that benefit to existing customer (having floating rate option)- without
delay & without such extra payment schemes (where existing customers will be
converted to new customer).

RBI / Central Government are the governing bodies, but they may not have any
control on this.

As a common man, confused with the situation. Don't know who can help us.
There is always hope from Consumer Court, but not sure, if this issue can be
discussed in consumer court.

I have taken insurance on my both the loans from ICICI for security purpose.
Even I don't know now my new customer status in case of Home Loan, will
nullify the insurance coverage for my home loan.

Minimum Expectations are
1. There should be way out (loan transfer), without any transfer charges, if
banks due to some reasons can't reduce their interest rates.
2. There should not have discrimination among new & existing customers of
loans, because this is cheating with existing customers.
3. Converting existing customer into new customer to provide the benefits-
that too by charging existing customers should be avoided.

Though solution is only in chnage in FRR/PLR appropriate to repo- without
any delay.

Please find my Loan Details:

HOME LOAN
Loan Account No : LBPUN00000784486
Application No : 7772431894
Customer Name 1. GANESH PANDURANG WATVE 2. Shreyasi Ganesh Watve (my
wife)
Product : ICICI BANK -HOME LOAN
Sanction Date : 11/05/2004
Sanction Amount (Rs.) : 1120000
FRR/PLR (%) : 13.75
Variance : -.75
Interest Rate(% p.a) : 13
Interest Rate Type : Floating
Balance Tenure In Months : 270
EMI For Last Month (Rs.) : 12013
Status As On : 03/04/2009
Loan Status : AUTHORIZED
Disbursal Status : Fully Disbursed
Total Amount Disbursed (Rs.) : 1120000
Overdue Details
Pre-EMI Overdue (Rs.) : 0
Installment Overdue (Rs.) : 0
Other Overdue (Rs.) : 0.2
Unadjusted Amount (Rs.) : 0
Net Receivable (Rs.) : 0.2


TOP-UP LOAN
Loan Account No : LBPUN00001644030
Application No : 7777273953
Customer Name 1. GANESH PANDURANG WATVE 2. Shreyasi Ganesh Watve
(my wife)
Product : ICICI BANK -HOME LOAN
Sanction Date : 06/10/2007
Sanction Amount (Rs.) : 1170000
FRR/PLR (%) : 13.75
Variance : 1
Interest Rate(% p.a) : 14.75
Interest Rate Type : Floating
Balance Tenure In Months : 192
EMI For Last Month (Rs.) : 13451
Status As On : 03/04/2009
Loan Status : AUTHORIZED
Disbursal Status : Fully Disbursed
Total Amount Disbursed (Rs.) : 1170000
Overdue Details
Pre-EMI Overdue (Rs.) : 0
Installment Overdue (Rs.) : 0
Other Overdue (Rs.) : 0
Unadjusted Amount (Rs.) : 0
Net Receivable (Rs.) : 0

Kindly let me know, if consumer court can do something in this matter. As a
customer of ICICI home loan, expecting that floating interest loan means, it
should change proprotionate with Repo.


Thanks & Regards,

Ganesh Watve
09860035045