Uninformed / unregulated preclosure Charges levied and disaatisfactory closure to issues raised.

Should banks be allowed to charge foreclosure when customer is moving for better Rate of Interest.

  • No

    Votes: 0 0.0%
  • Yes

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Dear Mr. Appala Pranesh Rao,

Reaching out to you for an appropriate closure to the issue raised below.

Summary: I have availed a personal Loan from HDFC bank with Loan Account Number: 45681781.
Total Loan taken – Rs.1875000/-
Current Principle outstanding - Rs.1579230/-
Foreclosure charge Levied - Rs. 74590/- (@4.72%)

Basis the attached welcome mailer that I received from HDFC (Dated 4th March 2017) I was with the understanding that there would be no foreclosure charge levied if I closed the loan after completing 12 EMIs.
Basis which I have opted to transfer the loan account to a competitor who has offered me a lower interest rate.
During my visit to the HDFC Bank loans Branch in Sahakar Nagar, I was told a foreclosure charge would be levied at 4.72% of the principle outstanding which is an extremely high amount.
Besides the definition of Own Source is something I understand now. I do not recollect this being explained to me by the sales Executive who pitched for the loan / the verifiers who spoke to me over phone / the HDFC personnel who visited me at my office at the time of loan approval.
Even the images shared by the grievance redressal team of HDFC only states that normal Foreclosure charges will apply. However there is not clarity given to me as a customer on how much it would be. (It is being levied at 4.72% as per the statement given by the branch, however the mail below states it is 4%.
Also it is my understanding that the RBI has issued a directive to all Scheduled Commercial Banks dated 7th May 2014 – “It was indicated that in the interest of their consumers, banks should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. Accordingly, it is advised that banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.”

Attaching all referred documents for your perusal. Please provide an acceptable solution and oblige.
As it is completely unethical of HDFC to do something like this, Im also parallelly taking this up with National Consumer Forum and Banking Ombudsman keeping in loop my customers such as myself through Social media.

Srinivas S
9108023927 / 9481472528

From: "Grievance Redressal"<Grievance.Redressal@hdfcbank.com>
Sent: Wed, 28 Mar 2018 10:18:57
Subject: Re: 'HBL=047-779-967' Request for Waiver of Preclosure charges loan account number - 45681781

Dear Mr.Srinivas S,

We acknowledge your email received at the Office of the Senior Management regarding Loan.

Our internal records and your email suggests you have raised this issue for the first time to the bank vide this email dated March 21, 2018.

We understand that our Bank official Ms. Shubhangi has tried contacting you, but unable to establish contact with you.

Your Personal loan of Rs. 1,875,000.00 was disbursed on February 22,2017 under a Golden Edge Scheme with our best possible pricing norms. Please note that under this scheme, customers can foreclose the loan after completion of 12 EMI’s with NIL foreclosure charges subject to the condition that fund for loan pre-payment is paid from borrower’s own account/resources. Otherwise, standard foreclosure charges (listed below) will be applied on loan prepayment. This is as per the terms and conditions laid down in the schedule of charges duly signed and executed by you, copy of which is attached herewith for your reference.

PrepaymentNo Pre-payment permitted until repayment of 12 EMISPrepayment13-24 Months - 4% of Principal outstanding,

25-36 Months - 3% of Principal Outstanding
>36 Months - 2% of Principal Outstanding

W.e.f July 01, 2017, GST @ 18% will be charged over and above the prepayment charges.

You are once again requested to visit our Retail Loan Service Center (address mentioned below) to obtain offer for loan foreclosure statement. Please do carry your original photo identity proof, print out copy of enclosed schedule page and a written request for loan foreclosure.

For a comprehensive list of service centers you may refer to www.hdfcbank.com >> Locate Us>> Retail Loans Service Center.

Thanking you in anticipation of your kind understanding in the matter.

In line with our focus and commitment to Customer Service, we trust that this Grievance Redressal Cell has addressed your grievance in a fair and equitable manner and the issue has been resolved to your satisfaction. If you are not satisfied with the resolution, you may write to our Principal Nodal Officer Mr. Appala Pranesh Rao at HDFC Bank Ltd., 5th Floor, tower B, Peninsula Business Park, Ganpatrao Kadam Marg,

Lower Parel (West), Mumbai 400013 or E-mail at pnohdfcbank@hdfcbank.com or Fax at 022-42197125.

Alternatively you can call at Tel: 022-30961541.

Warm Regards,
Kalpita Chavan
Customer Service Officer
Grievance Redressal Cell
HDFC Bank Ltd.

Our PhoneBanking numbers are available on www.hdfcbank.com> Find your nearest.

This interaction is being tracked through the above reference number and we request you not to change the subject line in future correspondence.


HDFC Bank officials or representatives will NEVER ask you for your personal information i.e. your card details, passwords, PIN, CVV, OTP etc. DO NOT share these details with anyone over phone, SMS or email

To read more about secure banking http://www.hdfcbank.com/aboutus/security/security_tips.htm

"The information contained herein (including any accompanying documents) is confidential and is intended solely for the addressee(s). If you have erroneously received this message, please immediately delete it and notify the sender. Also, if you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this message or any accompanying document is strictly prohibited and is unlawful. The organization is not responsible for any damage caused by a virus or alteration of the e-mail by a third party or otherwise.
Regd. Office : HDFC Bank Ltd., HDFC Bank House, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400 013. "


Hello Mr. Rao / Mr Puri,

Just wanted to add, all this is done after HDFC Declines by Top up loan application in November 2017, Wherein i had intended to satisfy some financial need of mine and reduce my Interest liability. Loan application Number: 52724171.
(This was again done because your team keep calling me to offer top up)

What is more annoying is that the top up was declined basis a wrong Cibil Update from your side. I.e. a credit card of a different customer was updated in my Cibil profile
Card number listed: 0005241810403974579
Outstanding: Rs.54064/- (at the time)
Customer contact number: 9901053883

Last but by no means the least, your customer care reverts to me (Without checking a ting) stating i should pay for it. When i called you credit card customer care to escalate. They check and conveniently ask me to download a form fill it up and take it to a branch so that the Cibil profile can be updated.

You update my Cibil profile wrongly. Even after repeated follow ups, the closure is dependent on me to visit your branch.
You decline my top up request basis the wrong Cibil scores.
i get a different bank to take over the loan and you charge me of a foreclosure charge which was never clearly explained.

And to top it all up, i will now miss my EMI for April and end up being labeled as a defaulting customer. while you have done all this and yet are happily expecting me to pay foreclosure charge.

@ Mr. Puri - With respect to your designation and experience. i don't think you have the right people / processes in HDFC.

I will be filing for compensation with the consumer forum for all the mental and physical stress i had to go through because of your bank messing things up and not be reasonable.

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