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Arjun Arjun (**)     22 August 2014

Interest rate

I availed a home loan of Rs.5 lakhs from Federal bank Ltd in June 2013 at floating interest rate 10.25% p.a.In the loan document ,it was written that the payable interest will be 0.05% above the base rate or any rate ,as fixed by the bank from time to time.At the time of availing loan,the base rate was 10.20%.
In November 2013,I got a letter from bank that they're going to increase the base rate by 10 basis points and the new interest rate payable by me will be 10.60% p.a.
I've been paying the EMI at these rates without making any default.
But,now,I came to know that bank's base rate has not changed since I availed the loan.The bank was telling lie to me that they revised the base rate and thereby increased my loan interest rate.
Also,eventhough the bank set my loan interest rate at 10.60 p.a,they give loan to new borrowers(irrespective of their credit score/risk) at 10.25% p.a.
I think the bank has cheated me.Can I get the refund of the excess interest they've charged from me?Please help me.
Thanking you,
Yours faithfully,


 3 Replies

RAJU O.F., (Advocate)     22 August 2014

You may ask the head office of the bank the base rate from June 2013 till now to ascertain your doubt was correct. I don't think a bank will cheat you alone telling the base rate was increased. Banks have many other ways to cheat without your direct knowledge. Banks have discretion to fix base rate on a particular day applicable to all their branches, but according to the risk perception addition of some percentage over the base rate, which may vary for different accounts. If you are not satisfied with the said bank, you may switch over to another bank of your choice, if they take over your a/c.

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You may obtain the base rate from time to time in the bank's website.If not seek it under RTI Act and have it checked with your loan account statement. Should there be any variation,take up with the branch  in writing and in case of no response ,refer to the controlling office.Again if no response, you have option  to refer to the Banking ombudsman and RBI too till your grievance is redressed to your satisfaction.

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Arpit lalan (Legal Consultancy/Advocate)     26 August 2014

I would tell you that first you find out in deatil through RTI if the Base RAte charged to you was correct or not. In 1  month you will get the reply.

Further, you can write to the banking Ombudsman with this complaint and you wil be heard on this. Before this step you should write to the GM etc of your bank, get an answer to this.

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