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Old 30th July 2008, 11:59   #61
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Why is there such a policy? All bank should care is whether the applicant can pay EMI or not. Is it a history that Indica owner who bought Safari default on their loan?

How about a personal policy of not approaching banks whose name starts with 'HD' and rule out HDFC?
It does not stop at that. HDFC bank also has a policy of giving only upto 80% of loan on safari. For other cars they go upto 90-95% on ex showroom price.
This was also not communicated to us.
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Old 30th July 2008, 12:27   #62
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It does not stop at that. HDFC bank also has a policy of giving only upto 80% of loan on safari. For other cars they go upto 90-95% on ex showroom price.
This was also not communicated to us.
Any bank is free to have loan policy as they desire. If they have a policy to not finance Safari for an Indica owner, and finance only upto 80% for Safari, they must be having their reasons and data for that. We must understand that giving loan is risky business and a bank has to protect it's interest.

The mistake they or rather DSA made was that it was not communicated to you.

\N
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Old 30th July 2008, 12:44   #63
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80% loan is understandable. But denying Indica to Safari upgrade? Lacks sense.
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If they have a policy to not finance Safari for an Indica owner, and finance only upto 80% for Safari, they must be having their reasons and data for that.
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Old 30th July 2008, 12:48   #64
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80% loan is understandable. But denying Indica to Safari upgrade? Lacks sense.
There must have been cases where people upgrading from small cars to a 10 lakh vehicle were unable to pay EMIs.

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Old 30th July 2008, 12:51   #65
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I can't upgrade from Indica to Safari, but I can directly apply for safari and get a loan !! That sounds like a joke.
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There must have been cases where people upgrading from small cars to a 10 lakh vehicle were unable to pay EMIs.

\N
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Old 30th July 2008, 12:52   #66
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Why is there such a policy? All bank should care is whether the applicant can pay EMI or not.
Exactly, problem is how to verify if you can pay EMI or not?

Banks can't do that based on IT returns / Form 16 / Income documents alone. All these documents are faked easily. It is bad to the extent that even CIBIL does not use PAN Number as single source of identity.

To take care of that risk banks use these patterns. And most of these are based on data.

Other option would be to deploy managerial level staff at each branch to manually verify things. But that costs money. So only PSU banks do that.

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Originally Posted by tsk1979 View Post
It does not stop at that. HDFC bank also has a policy of giving only upto 80% of loan on safari. For other cars they go upto 90-95% on ex showroom price.
This was also not communicated to us.
This % depends on resale-history of repossessed cars. HDFC screwed up by not telling you about it up front. (IMHO this again was a screw up by DSA)

While I was finalizing my car, I was told that Alto qualifies for 100% on-road price loan if you are Classic/Premier customer and have salary account for more then 5 years.

Was looking at Spark as well, bank clearly told me they wont give loan based on on-road price for Spark.

Went to dealer, DSA that was attached to dealer knew none of these policies and as per him loan on 100% on-road price was impossible.
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Old 30th July 2008, 12:56   #67
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I can't upgrade from Indica to Safari, but I can directly apply for safari and get a loan !! That sounds like a joke.
Try applying for a loan for a safari as first car.

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Old 30th July 2008, 13:33   #68
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Quote:
Originally Posted by ntomer View Post
Try applying for a loan for a safari as first car.

\N
Actually you can't they will deny loan, and approve only if you push it

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Originally Posted by NetfreakBombay View Post
Exactly, problem is how to verify if you can pay EMI or not?
I guess when you have a salary account bank should know. Otherwise why do banks advertise "Pre approved loan for any car XX amount for you".
I used to get spam with these messages very month from HDFC.
When they called and said loan rejected, I told them why were they sending me mails of pre approved loan.
Then the bank guy in noida says he will check, and says sir you have a pre approved loan, and we will give you a loan slightly higher
Forget the DSA, the bank employees don't know themselves what are the banks policies.
Ditto for this 15.5% interest fiasco. I had clearly mentioned I don't want any payout, put all discount in interest rate. But lack of communication and more confusion.
The day I applied bank send its agents to my home, office and permanent address for verification, 3 days before delivery that noida guy says no verification has been done. It appears that branch at ludhiana forwarded the loan application(which is should not have) but did not forward the verification information.
Result? Again verification was done.
If this is not silly incompetence what is it.
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Old 30th July 2008, 14:25   #69
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Do you realize that you are saying that corporate entities are right in trying to cheat customers as long as they can't be sued for it?
I am just saying that we should also not fall into their luring tactics & forget ourselves. Whatever might be their claim, if we sit down & plan things & put every promise on paper & go about it in the old fashioned way, there would be no chance for these kind of goof-ups. After all it is the bank's money, not yours until you repay. I agree the quality of work in many areas in banks & other institutions have been going down all the time, but we should also use our own sense & not let the occasion overcome ourselves.

Please go ahead & sue the bank. That will make them treat future customers differently.
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Old 30th July 2008, 15:03   #70
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Many of my friends bought Civic as their 1st car on loan. How did that happen? HDFC folks will be scrared to hear this fact.
Quote:
Originally Posted by ntomer View Post
Try applying for a loan for a safari as first car.
Loan rejected for less rate but approved for higher rate: That means you can pay more EMI
Quote:
Originally Posted by tsk1979 View Post
Ditto for this 15.5% interest fiasco.
I think the folks who came with 'Deny Indica2Safari Upgrade' policy are of moronic type. Glad that they are in private sector. If they were in Traffic Police Dept, they would have banned Indica from highways because Indica was involved in accidents in most cases
Quote:
There must have been cases where people upgrading from small cars to a 10 lakh vehicle were unable to pay EMIs.
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Old 30th July 2008, 15:18   #71
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Default New Gen Private Banks = Morphed old time money lenders

all the new gen private banks are same. they are nothing but old gen money lendred who looted poor people. they just morphed themselves in to banks. just google HDFC- cheating and see the results. here iam attaching a case which is similar to TSK case. from this it is clear that

It is indeed the operational policy of HDFC bank.

hdfc bank ltd Complaints - personal loan EMI cheating

HDFC / Credit Card Complaints - Credit card cheat!

HDFC Credit Card Complaints - CHEATING BY HDFC

That's How It Really Works !!: HDFC Bank - Totally Sucks

I have read in news papers few years back where HDFC was fined by consumer court for deducting 20K from a savings a/c as VISA card spending when the guy has not spent it. they refused to credit back the amount and could not show any proof that consumer has actually spent it. so court fined them and asked to refund 20K

Some of the smart policies adopted by these banks to earn profits

1. Lure customer by offering loans at very low rates ( 99% case floating loans only no fixed loans) and raise the rate with in two/three months because customer can not go any where
This is a perfect 420 case.

2. collude with corrupt builders and give loans for sticky properties-- benefit afterward if a customer wants to transfer it other bank his chances will be less because property is sticky

3. do not credit salary/inward checks for few days and bounce outward checks and charge - penalty ----- increase in the fee based income of bank. just check the annual reports of these new gen banks and see how much % increase they have in fee based income. this happens even if you have a FD with them which has the option of conversion automatically( this is for getting FD only it will work when you need it)

4. sanction OD with out customer asking for it and charge fee for it ( CITI is specialsit in this)

5. Convert OD it to term loan with out informing customer even if he has enough balance in the a/c to clear to OD and charge astronomical interest rate like just 3% per month

5. give pre approved loans with auto debit facility - but once the loan is taken - the famed auto debit won't function. you will be a defaulter without your fault

6. you clear the loan then miraculously auto debit will start to function and debit your a/c with EMI for loan which is already cleared. if you notice- polite sorry will be result.

7. charge existing customers very high rates and lure new customers with very low rates -- Is the Motto of these banks

Actually i feel they will test customers like this. if the guy notice it leave him. if he does not it is profit for bank
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Old 30th July 2008, 15:31   #72
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Originally Posted by diabloo View Post
Many of my friends bought Civic as their 1st car on loan. How did that happen? HDFC folks will be scrared to hear this fact.
Different banks have different policies for people in different risk categories. I drive a Getz HDFC approved my loan for a Laura, although I didn't avail it.

Quote:
Originally Posted by diabloo View Post
Loan rejected for less rate but approved for higher rate: That means you can pay more EMI
Nothing really funny about it, riskier loans attract higher rate of interest.

Quote:
Originally Posted by diabloo View Post
I think the folks who came with 'Deny Indica2Safari Upgrade' policy are of moronic type. Glad that they are in private sector. If they were in Traffic Police Dept, they would have banned Indica from highways because Indica was involved in accidents in most cases
I couldn't really understand this analogy. It is a bank's prerogative to define a customer's/vehicles's risk profile. They are not forcing anybody to take loan from them, if you don't like their policies, move on.

This doesn't mean that I am saying that what HDFC did with Tanveer was right. They (or their DSA) didn't pass on the necessary information to Tanveer, and it resulted in trouble for him. But in the end, they did sort out things with him amicably.

In these troubles times, banks have to doubly sure before giving credit to anybody. NPAs have sunk many giants already, and no bank can afford to take these lightly.

\N

Last edited by ntomer : 30th July 2008 at 15:42.
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Old 30th July 2008, 15:32   #73
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Hi all,

Like any mass business analytics make a lot of sense for any financier. First for considering the profile of a salaried borrower they observe the company he is working in, what level is he at within the co, what are the defaults from that particular organisation, what are the cars you are buying etc.

If one blindly follows analytics or statistics one is mislead, the actual expertise counts when an experienced banker manages his risk looking at analytics and statistics. The maturity of making decisions based on data is important and this is what seperates the big boys from the incompetent ones.

Someone up there at HDFC Bank may have decided that recoveries for Safari and subsequent asset liquidation is a huge challenge and hence denied Tanveer his loan on the first attempt (please do note that the department handling autoloans may not have access to his relationship records) - again a dilbert moment.

In all such cases I have observed that the DSA's ability to portray a sale matters most. For example if I state that a Municipality worker is denied a loan despite his solid banking and employment history. Subsequently the smart DSA will mention his employment as a "Government worker" which is not lying but playing with specifics.

The loan is then approved. Voila.

Welcome to modern age banking - the USA is far more evolved in risk management. Having worked with the top banks all I can say is that their system of credit rating is far more evolved than the circus we have here in India.

Circus why ?? - A friend of mine has two birth date proofs, one is an erroneous one, the other is the corrected one by fate both documents are separate say a birth certificate and a school leaving certificate.

According to bankers that makes him two seperate entities and has credit cards with limits @ 120 times his salary.

Dilbert moment of the day !

Cheers
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Old 30th July 2008, 15:38   #74
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rkg, the links you posted is quite an eye-opener esp the last one where a HDFC Bank customer holding a Salary Account was forced to close his Account because he changed his Company and the new Company has a Salary account elsewhere!
He was in a real soup coz he had given his HDFC A/c no for Mutual fund, Shares dividend credits etc.

Just because he changed his company, can the Bank forcibly close his Account?

Ideally, they could have changed the Account type from Salaried to Savings A/c!
A win-win situation for all!
But, sadly he was forced to close his Account & he moved to ICICI Bank for good!

Now, I am worried, I also have a Salary A/c with HDFC Bank, have given countless ECS mandate on this Account, what will happen if I change my Company & the new Company doesn't deal with HDFC Bank?
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Old 30th July 2008, 15:39   #75
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I like the term 420
Quote:
Originally Posted by rkg View Post
1. Lure customer by offering loans at very low rates ( 99% case floating loans only no fixed loans) and raise the rate with in two/three months because customer can not go any where
This is a perfect 420 case.
This is classic case: If ECS, don't debit on the give day and then charge customer for default on payment of EMI.
Sample charges for default of payment:
1. Bounce charge: 500
2. Agent collection charge: 1000
3. Default on EMI: 1200
4. Tax on default payment (till the date they finally debit it): x
So total charges end up more than 3000 for every default

I guess the banks declares bonus to its employees from the money extorted from customers !!
Quote:
5. give pre approved loans with auto debit facility - but once the loan is taken - the famed auto debit won't function. you will be a defaulter without your fault
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