Arbitrary and excessive increase in interest margin on home loan availed from Standard Chartered Bank

Ref:	Home Saver Loan Account No. 52205936853
	Home Loan Account No. 48061093

Dear Sir

I have availed loans for purchase of property from Standard Chartered Bank (SCB), Barakhamba Road, New Delhi under their products viz. Home Saver and Home Loan.
The loan was sanctioned at Base Rate +100 bps in August 2010 with effective rate of 8.25%. The interest margin was supposed to be fixed during the tenor of the loan and rate was to change subject to change in Base Rate, as mentioned in the sanction letter.

	Home Saver Loan Account No. 52205936853	Home Loan Account No. 48061093
Current Interest Rate	11.93% (Base Rate + 2.43%)	11.93% (Base Rate + 2.43%)

Subsequent to disbursement, there were number of upward revision in the interest rate owing to upward revision in base rate, which seems to be justifiable owing to upward fixation of Base Rate. However, I have received a letter from SCB in March 2011 that they have increased the interest margin also from 1% to 1.77% and then a SMS in August 2011 that margin has further increased from 1.77% to 2.43%. At no point of time, it was mentioned that the interest margin is also subject to change. This increase of 143 basis point is 143%% and is totally unjustified, despite the conduct of account being excellent.

I had had a number of correspondence with them over email, call centre, relationship manager and senior management since receipt of mentioned letter but of no avail.
SCB at the time of loan appraisal and documentation has also put pressure for availing home loan related insurance products from the vendors of their choice.

During all my correspondence with SCB I have requested that increase in interest margin is not in line with the terms mentioned in the sanction letter. The interest margin was supposed to remain fix over tenor of the loan and the sudden substantial increase in interest margin is unjustified. However, SCB attitude towards the issue is totally non cooperative. I assume it is their strategy to quote a lower interest margin, take the business, make the disbursement and then increase the interest rate within 6 months. I request intervention of RBI to stop this unethical practice of SCB to fleece unassuming home loan customers. SCB is acting against the Fair Practices Code stipulated by RBI. I request RBI to instruct SCB for restoring the interest margin to 1% with retrospective effect.