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Issue with bank - home loan

am an NRI - availed a  home loan with a nationalized bank last year.
there were some unauthorized charges posted to my account in the name of home insurance .
i have sent multiple email mesages and made phone calls to the branch manager
but no proper response so far. how can i take this forward.
all my communication has been through email and phone so far..not sure if i can use
the online RBI bank ombudsman option since it is asking me to provide attachments of the representation made.'
i feel these banks are taking NRIs for ride just for the fact that they know we are not living in the country and not able to come and meet in person.
kindly advise how to get this resolved


 12 Replies

Sarvesh Kumar Sharma Advocate (Advocacy)     04 October 2013

Go to consumer forum file a complaint regarding this issue!

Sudhir Kumar, Advocate (Advocate)     04 October 2013

Is your house insured?

whether loan terms oblige you to insure house?

Udaya Shankar. C (Retired)     04 October 2013

Hello:   Please check the loan document. It is not mandatory to take home loan insurance. If they have fraudulently debited to your account, I suggest give authorization to your relative to file a case in consumer court on your behalf and to attend the case. Please furnish all the relevant documents, bank statement etc.,.  Even after filing case in RBI ombudsman, you will not loose your legal right to approach consumer court. Approaching Consumer court costs nothing.


 i agree that per the condition of home loan approval letter ,home insurance is mandatory as claimed by the bank.

but below are my concern,

1, why did the bank purchased a home insurance from its affiliate sister company without my consent and added the premium for the same to my loan account?
2, the sum insured and tenure seems to be more than my loan availed amount and tenure.i availed a tenure for 10yrs only but bank purchased a insurance tenure for 25 yrs thereby increasing my premium
3. why am i not given a choice to buy a home insurance on my own

are my claims valid to approach  the consumer court..or can i approach insurance regulatory/ IRDA for this?

T. Kalaiselvan, Advocate (Advocate)     04 October 2013

Please check if the home insurance is to be availed only form the insurer pointed out by the banker, I dont think there is any compulsion for buying insurance from a particular company.  Further, you put all your grievances in writing with acknowledgment card to the Bank manager with a copy endorsed to his higher officer, on the reply you pursue further course of action.


thanks for your reply.
there is no such thing as buying home insurance from a specific company per the loan disbursal/approval letter.
i had sent multiple reminders to the bank officals regarding this but no reply at all.
when i contacted the insurance company (which is again a sister concern of the bank) from whom a home insurance is purchased, they informed me that the request to purchase a home insurance and premium amount came from the loan disbursal division and they added me to the policy based on that.

can i file a complaint with IRDA aginst the insurance company regarding this?

the fact that am currently residing abroad makes the process little time consuming and complex for me, but i definitely dont want to give  up on this.

Sudhir Kumar, Advocate (Advocate)     06 October 2013

You are just deviating from the main issue.


The basic points at issue are:-


  1. Whether there is or there is not any clause for loanee to have the property insured


                      Observation  It is highly imporbable that any bank will give even a single penny of loan without putting an obligation to the customer to insure the property which is hypothecated or mortgaged, at the cost of loanee.  Better consult the bulky loan loan deed.


      2. whether you hve got the house insured and informed the bank if such clause is there

                        Observation  If such clause is there and you failed to get the house insured then the bank is justified to get the house insured and bank is not obliged to bear the cost (unless loan deeds so stipulated)

Sudhir Kumar, Advocate (Advocate)     06 October 2013

In any case you have no case against Insurance company.  Being being loaner is interested party in the property and justified to get it insured to protect their insurable interests.  You need not waste time with IRDA.


Further insurance company has acted in magnanimity.  You never approached them for insurance of house and still they have added you as beneficiary./  This way if there is any loss to the house then the bank will be entitled only for the part of outstanding loan and remaining amount will be yours.


i can definitely understand your point.
i am not saying that i dont want to taken a home insurance especially if it is part of the agreement and the bank has every interest to protect the property they had financed.

but ,am asking, is it fair enough..

1. to force me to buy a product of theirs when i can get a very discounted premium rate from other insurers in the market?
2. to take a insurance very much higher than the basic requirements of the home loan..thereby increasing the loan is only for 10 yrs but they had taken the insurance for 25years..? does that sound reasonable  and justified..

i dont see anything being magnanimity/generous from the side of the bank here and it is just that they are trying to rip off their loan customers with a higher premium rate and I wanted IRDA to know about this practice of theirs.

kimsmith (India)     03 December 2013

I agree

kimsmith (India)     03 December 2013

When a number of large corporations went to the government for a bailout during the recession a few years ago, one of the first things the American people wanted curbed was executive compensation. A business that unsuccessful miserably and wanted TARP help shouldn't be lining already padded pockets. However, a brand new report has found executive compensation slightly dipped even while a number of firms, such as General Motors, AIG and Ally Financial, were receiving TARP funding. The use of the repayment of housing loans as the basis of these securities in many cases of the lending for housing during the boom was based on asset-backed securities. Therefore, when the housing prices fell, the mortgage defaults increased. The securities used fell in value causing capital losses for firms holding them.  Source for this article: Troubled Asset at TARP

kimsmith (India)     03 December 2013

And besides, during the middle of the recession in the past couple of years, a number of people were angry that large bonuses were being paid to professionals whose corporations were getting taxpayer-funded bailouts.

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