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Nihar (None)     08 December 2012

Hdfc asking for money to reduce interest rate


I availed a home loan from HDFC Ltd. in September 2012 at 10.50% and paid Rs 11236 as processing fees. They said that interest rate is floating and EMI will go down or up as and when HDFC reduces or increases interest rate. I recently found out that they reduced interest rate to 10..25%. When I asked them to reduce EMI, they are asking for Rs 8000 as processing fee. I wasn't informed of any such fee at the time of application. I also learned that the interest rate of 10.25% was effective before disbursment of my loan. Please advice. I am willing to take it to consumer court if needed but I need to know if I can build a case against them. They didn't tell me about any charges related to reduced interest rate.




 7 Replies

Kumar Doab (FIN)     08 December 2012

“I also learned that the interest rate of 10.25% was effective before disbursment of my loan.”

This is sufficient cause.

“I wasn't informed of any such fee at the time of application.”

Has this bank given you the certified copies of loan application, loan agreement? Bank is under obligation to supply and you are within your rights to get it free.

You may go thru brochure, loan application, sanction letter, loan agreement and all documents and communications.

Once you are satisfied that no such clause/fee is incorporated you may issue notice addressed to local BM/Nodal Officer/MD


{ which you can also do} and ask for resolution say within …..7 days and if the bank does not resolve to your satisfaction, you may proceed to DCDRF.

You can also address to BCSBI, IBA, RBI {BO}.

Pehredar at National Televsion in its programme on 06th Dec, 2012 aired complaint of HDFC bank customner who was coerced and presuurised to buy a ULIP policy from pvt. Life insurance Company of the bank to avail locker fascility.

The customer narrated his woes at National Television and Bank apologized and provided locker without the condition of ULIP policy.

Some of the consumer help portals have been doing good job.


1 Like

Nihar (None)     08 December 2012

Dear Sir, thank you for detailed reply. This is HDFC Ltd not hdfcbank.

They haven't provided me copies of loan application and any brochure, I have a copy of loan agreement which doesn't have any mention of any fee for reducing interest rate.

When they asked for processing fee for reducing interest rate I sent them an email with following questions:


1. Why conversion fee of Rs. 8569? How did you come to this figure? I was told that this is floating interest rate and will go down when bank reduces interest rate and will go up when bank increases interest rate. I wasn't informed that there will be a conversion fee.
2. From what date you reduced the interest rate? Why didn't you inform me earlier that interest rate has been reduced.

3. Will you follow the same practice when interest rate will increase - a. you will not inform me about increase, b. you will not increase EMI or tenure automatically, c. you will ask for conversion fee.?
4. You didn't respond to my request about your Fair Practice Code in my previous email. Please send me the same.


HDFC ltd. hasn't published any email id on their website for grievance redressal department:

I will ask for copies of all documents and will send a letter to grievance redressal dept. if I don't hear from them by December 20, 2012.

Kumar Doab (FIN)     09 December 2012

Regret to read HDFC Ltd as HDFC Bank.

Housing Development Finance Corporation Limited (HDFC) headquartered in Mumbai is the biggest private sector public housing mortgage company.

You should ask for the certified copy of if not brochure then letter of offer, the loan application, sanction letter etc. The companies do not shy and  claim that clause……was mentioned in say sanction letter…..if not in agreement.

It is felt that RBI has advised that rules for NBFC/FI/FII be same as that of banks.

BCSBI has set some guidelines:

4. Should banks communicate changes in interest rates?

Yes. The banks must inform you when they change interest rate on housing loan. (cf. para 3.3. of ‘Code of Bank’s Commitment to Customers.)

Ask the bank to give a copy of the revised repayment schedule of the loan every time the interest rate is revised.

7. How and when banks should communicate changes to terms and conditions?

·         · In terms of para 3.5 of ‘Code of ‘Bank’s Commitment to Customers’, banks have to inform customers changes in terms and conditions one month in advance. Changes to the terms and conditions may be communicated through any of the following channels:

o        Account statements

o        ATMs

o        Notice Board at each branch

o        Internet, including email and website

o        Newspaper

·         If your bank makes any change without notice, it will notify the change within 30 days. If such change is to your disadvantage, within 60 days you are free to close the account or switch it without having to pay any extra charges.

10. What are the fees and charges applicable to the loan?

Generally, banks levy fees/ charges for:

·         processing loan application

·         documentation

·         late payment

·         changing the loan tenure

·         switching to a different loan package during the tenure

·         prepaying a portion or full loan

·         restructuring the loan

·         changing from fixed to floating interest rate loan and vice versa

Some of the other charges levied by banks are:

·         legal fee

·         technical inspection fee

·         recurring annual service fee

document retrieval charges, etc

11. Do I have access to loan documents? If so, what are they?

Yes. You can have access to loan documents. Following are some important documents provided by banks:

·         letter of offer

·         copy of filled in loan application

·         copy of loan agreement

·         terms and conditions governing the housing loan

·         other documents such as schedule of fees and charges

Banks are required to give authenticated copies of documents executed by you free of charge. (cf. para 8.11.1 of Code of bank’s Commitment to Customers)

A local lawyer handling consumer cases can also advice you after looking your documents and can structure your communications to tilt the record in your favor.

Nihar (None)     23 December 2012

I had requested copies of my loan documents on November 16, 2012. Also I asked for a copy of their fair practice code, date when new interest rate came in effect but they didn't respond even after 4 weeks wait. I have sent their business head a letter about the same but they haven't responded yet.. please advice if this can be considered as a ground to go to court...

Kumar Doab (FIN)     23 December 2012

It seems that you are not able to extract the documented information from local office of HDFC on your own. Consult your lawyer.

Has this company displayed all charges on its web site. You may obtain screenshot of the charges and send them to local BM by email and build record. Also ask him in your email to specify where the charges being levied to you are communicated to you in the offer letter/loan application form.


If you wish you may supply a letter to Chairman or Deepak Parikh or Board members of the HDFC { obtain list from its website}, and complain that their business head is not replying, and demand reply by redg. post only so as to reach you in next 7 days. You may mention that postage prepaid {as purchased from PO} self addressed envelope was enclosed for sending the reply by redg. post only. Still no reply is supplied. Demand compensation and refund of charges incurred by you towards sending communications, doing research, visiting offices and company personnel, harassment etc….

Thereafter don't waste more time in communications and approach your lawyer, and proceed as deemed fit.

You may log onto RBI website and study all rules and circulars issued for NBFC, Housing Loan companies etc

Some of the circulars are enclosed. RBI has issued guidelines time and again to state all kinds of charges in offer letter only. RBI has also issued guidelines not to keep any hidden charges. You need to do some research on your own and find the relevant information.

{Look into attachment NBFC guidelines on Loan by RBI}

Regulation of excessive interest charged by NBFCs (Notification No. DNBS. 204 /

CGM (ASR)-2009 dated January 2, 2009)

“(a) The Board of each NBFC shall adopt an interest rate model taking into account

relevant factors such as, cost of funds, margin and risk premium, etc and determine

the rate of interest to be charged for loans and advances. The rate of interest and

the approach for gradations of risk and rationale for charging different rate of interest

to different categories of borrowers shall be disclosed to the borrower or customer in

the application form and communicated explicitly in the sanction letter”

A customer harrassed by NBFC has initiated an interesting thread at following link:


You may go thru it.


Valuable advice of learned experts/members is sought.

Attached File : 818357258 nbfc guidelines on loan by rbi cfpcr260312.pdf, 818357258 nbfc fair practices code cfpcr260312.pdf, 818357258 nbfc master circular 26mc020712fl.pdf downloaded: 298 times

Nihar (None)     03 January 2013

Dear Sir,

I made a follow-up call on December 31, 2102 regarding the letter I had sent to the business head office. After the call I sent scanned copy of my letter as reminder via email. I also attached recording of communication for their reference. I received a response today where:

1. They didn't attach their fair practice code, rather asked me to go to
2. They didn't tell me the date since when hdfc started offering 10.25% interest rate.
3. From email it looks that they weren't going to send any written communication.
4. About the recording they said following:
We would like to mention that the recording of the telephonic conversation, that you have attached to the trailing email is unauthorized and as such was undertaken without any pre-disclosure or consent and as such is unauthorized. We would advise you to delete the same and not retain any copies to avoid any misuse, which will  not be our responsibility.

I am not sure what scared them about call recording but just asking if I am within my rights to record any call from HDFC and any call to HDFC. I record communication because when I first called the hdfc branch office, the manager, instead of explaining things, said "hamara maal kaise bhi beche".

I have already told them that my email was only a reminder and asked them to send written response to my letter.

About reduced interest rate they told me following:

The rates fluctuate in accordance to the fluctuation in HDFC’s RPLR ( much in lines of what is detailed in the Loan Agreement , a copy of which is in your custody). The charges vary from time to time, however the option and consequent fee is duly mentioned in the Loan Agreement.

I checked agreement and RPLR is mentioned there however they never explained the calculation to me before. I read fair practice code on and it appears that they violated following:
The Corporation shall inform its customers of all financial information such as rates of interest, charges, method of calculation etc through brochures, posters or

during the course of meeting with the customers etc prior to entering into any transaction.
The Corporation shall disclose, by such mode and in such manner as deemed fit, to ensure transparency, all information affecting the interest of the borrower including but not limited to :fees/charges payable for processing loan application;
the amount of fee refundable, if any, if the loan amount is not sanctioned;
Prepayment options and charges, if any;
Penalty for delayed payment, if any;
Conversion charges (Switching loan from fixed to floating rate or vice –versa);
Existence of interest re-set clause, if any.

It seems that they also didn't stick following as per their fair practice code because they didn't respond to my first email requesting for documents for over weeks. Even the business head responded only after follow-up that too with incomplete information. They didn't provide me copy of agreement saying it was given at the time of loan disbursement.
The Corporation shall endeavour to address/respond to all complaints and grievances within a reasonable time and keep the customers informed about the status of their complaints.

Please advice if I have a case against the company for not informing me about charges, calculation of charges, not adhering to their own fair practice code, not responding to letter/emails on time.

Kumar Doab (FIN)     03 January 2013

You have posted that:

--“1. They didn't attach their fair practice code, rather asked me to go to”

The said Fair Practices Code should be made available to customer in Branch Itself and a hard copy on demand.

Write to them that you are willing to pay the cost if any provided they claim it in writing along with law of the land/rule of regulator vide which they can claim the cost from customer and docs so supplied against payment should bear original seal and signature of competent employee of the company on each page with date and his/her full name with sirname designation department address with pin code phone number with STD code email id should be written below his/her signature.

You may decline to visit their web site at your cost and obtain the copy by downloading and printing at your cost.

Address your such letter to BM and Chairman of HDFC.


2. They didn't tell me the date since when hdfc started offering 10.25% interest rate.

Demand it in writing and mention that each representation that you make and phone call/email/letter/visit in person does not come free to you and costs you your hard earned monies, precious business; official, personal hours and you shall not waste it on them. Simultaneously attach the detail of each expense e.g. traveling to office/cyber café/PCO, parking charges, typing charges, internet and whatsoever comes to your mind and time consumed and cost of your time and then total of expense incurred by you and claim it from them by letter by cheque.


3. From email it looks that they weren't going to send any written communication.

Demand a letter from Chairman and BM in writing under acknowledgment.

They are duty bound to supply everything to you.

4. About the recording they said following:

Let them say whatever they say. You have evidence on your hands.

Ask them to write that do they record calls o f customers or not?

Highlight each violation in writing and demand that they accept it and apologize in writing by letter under original seal and signature.

Highlight that company did not respond to you and only after your frequent reminder they sent a half hearted incomplete irrelevant reply and demand reply to pendencies at their end.

Mark a copy to RBI official who has issued guidelines for NBFC, and who handles customer grievances.

Approach your lawyer to structure and draft your representations and let your lawyer evaluate the merits and proceed under expert advice of your lawyer.

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