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Old 5th December 2007, 10:49   #1
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Default ICICI charges interest on amount which was never disbursed

one of my friend took home loan from ICICI in may 2005. he took a flat in south city bangalore. he opted for full disbursement of loan even though the flat is going to be completed a year later. accordingly ICICI told him they have send full amount to L&T. now when the flat is ready i.e after 2 1/2 years L&T says 4 lakhs is due.

then my friend contacted ICICI. ICICI is saying that they have sent the check but builder has not encashed it. it is not their fault. they will send it again now.

now the question is

all these two and half years ICICI is charging interest on this 4 lakhs.

why should my friend pay interest on this 4 lakhs which was never disbursed?
ICICI should have definitely known that 4 lakhs is not disbursed even if one accepts their version, their accounts should have shown this 4 lakh's. isn't it?

in such a case it should have informed the customer. this does not happen for 2 1/2 years. it came to light only when the customer asked it.
all these years it is simply collecting interest on the amount which was never disbursed
can you guys please advise me ,what to be done in this case
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Old 5th December 2007, 11:03   #2
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Go to consumer court.
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Old 5th December 2007, 11:14   #3
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Go file a complaint with the OMBUDSMAN ... the bank will come running to you!
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Old 5th December 2007, 11:25   #4
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The Banking Ombudsman Scheme:

Reserve Bank of India
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Old 5th December 2007, 11:43   #5
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IMO, since your friend had taken full advance disbursement, he is not at any loss. It is the builder who is at loss since he did not encash the amount up front. Unless the builder is asking your friend to pay something extra for the delayed payment, there is nothing that he needs to do. He has not suffered any actual loss.
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Old 5th December 2007, 11:57   #6
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Quote:
Originally Posted by pjbiju View Post
IMO, since your friend had taken full advance disbursement, he is not at any loss. It is the builder who is at loss since he did not encash the amount up front. Unless the builder is asking your friend to pay something extra for the delayed payment, there is nothing that he needs to do. He has not suffered any actual loss.
since he has opted for full disbursement and the bank is collecting full EMI from the beginning, bank should keep their side of the agreement, i.e; full disbursement. how can they collect full EMI when they have not disbursed the full amount?. it is not old time money lender stuff where the money lender will not keep his end of the bargain.
by end of the month the difference of 4 lakhs will show in accounts( this is true if the bank actually sent the check. knowing ICICI i doubt it very much)

thanks for the response. i have alredy told him to write to higher ups in ICICI and wait for week for response and then approach banking ombudsmen.

is there any other means and ways? i would like to know
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Old 5th December 2007, 12:14   #7
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Did the builder give a full payment receipt to your friend? They should have, since you made the full payment through the bank. So why did it take 2.5 years for your friend to realize this? All that I am saying is that, your friend does not have a valid case, unless he can prove that he has lost some money in the bargain. By taking full advance disbursement, your friend was anyway financing the builder and paying the interest for that. Some of the builders in Pune, actually offer a discount in the price or offer interest on the advance amount in case of advace disbursement. If that is the case with your friend, then that can be shown as a loss.

Anyway, I do agree that the bank should have informed your friend about the actual disbursement status. Best of luck to him in this.
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Old 5th December 2007, 12:15   #8
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Quote:
Originally Posted by pjbiju View Post
IMO, since your friend had taken full advance disbursement, he is not at any loss. It is the builder who is at loss since he did not encash the amount up front.
Buddy, there is no builder in India who would sit over a cheque. Looks who benefits from the delay and you got the culprit

Agree with kb and bblost, Ombudsman is effective
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Old 5th December 2007, 12:19   #9
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Buddy, there is no builder in India who would sit over a cheque. Looks who benefits from the delay and you got the culprit
Absolutely. So why did the builder wait for 2.5 years to ask the owner for payment? Like I said in my previous post, if it was a full advance disbursement, the builder should have issued a receipt for the full amount. I think since this is a corporate builder (L&T), may be they are not as greedy as the other common builders.
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Old 5th December 2007, 12:39   #10
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Quote:
Buddy, there is no builder in India who would sit over a cheque.
I agree ask you friend to ask for the cheque number of the cheque which ICICI claims to have issued to the Builder, if they dont have the cheque number then it proves that they havent issued any & hence should be made to pay the interest on the sum.
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Old 5th December 2007, 12:46   #11
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I agree with pj, imagine this...

SBI gives you a draft of the Loan amount (car), now you take it and give it to the dealer or worse keep it with yourself for 2-3 months.

I am assuming its given but the dealer doesnt present it.

Your interest clock starts buddy. Bank cannot be blamed(if they have released the cheque/draft).

Quote:
Originally Posted by pjbiju View Post
Absolutely. So why did the builder wait for 2.5 years to ask the owner for payment? Like I said in my previous post, if it was a full advance disbursement, the builder should have issued a receipt for the full amount. I think since this is a corporate builder (L&T), may be they are not as greedy as the other common builders.
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Old 5th December 2007, 13:01   #12
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my friend was repeatedly asking L&t for handing over of the flat. it was supposed to be handed over in oct 2006. it got delayed. as per agreement between customer and L& T, L&T will pay rental value of the flat for every month delayed. L&T did not ask for full paymet. my friend opted from bank. and bank agreed. as L& T got more than 85% at the beginning it self , i suppose they did not raise the issue. now when the flat is ready to be handed over they asked for remaining amount. it is common with every builder. they will hand over only after they receive full payment. till then if they get installments periodically they will not bother customer
dadu
what you suggested is draft. in that case it is correct. but here it is only a check. further no builder will keep checks ideally. ICICI does all these gimmicks. i faced them myself. i have mentioned earlier in another thread also

that case in nutshell is: i took P Loan opted for auto debit, kept enough balance in ICICI savings a/c for EMI. they did not deduct it. they simply added interest to principle every month stating that i did not pay EMI. every month i had to go and remind them for auto debit. when i cleared the loan, auto debit started functioning very effectively deducting EMI every month for non existing loan.
so i would like to know any other way to deal with this issue apart form banking ombudsmen.
getting the check number is good idea. i will do it.
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Old 5th December 2007, 13:21   #13
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Draft is different from cheque.
If the Bank had made the draft which was handed over to builder, its builders fault.
In case of cheque, if the cheque never got encashed, ICICI has no business in charging interest.
Ombudsman is the answer
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Old 5th December 2007, 13:57   #14
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Quote:
Originally Posted by pjbiju View Post
Absolutely. So why did the builder wait for 2.5 years to ask the owner for payment?
This is why............

Quote:
Originally Posted by rkg View Post
L&T did not ask for full paymet. my friend opted from bank. and bank agreed.
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Old 5th December 2007, 14:07   #15
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Unable to understand why your friend paid the full amount at first place itself. We know the bankers and builders how they behave.

You can ask the bank to give cheque no, date and amount and re-check with builder whether it is the same cheque. If ICICI is telling a lie then you can go to consumer court and file a case against bank. If they had issued the cheque and builder did not encash, then it is not bank's fault.
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