[fordday]

Originally Posted by PADAS

Despite of all my efforts to continue paying the EMIs, SBI has decided to not let me. I did not opt for the EMI holiday

The EMIs were deducted from my salary account and credited to the SBI Max gain A/c for month of Apr & May. Things were fine, but as of this week, I see that SBI have reversed the principal amounts credited for both months and added it to my "Drawing Power" in my Max Gain A/C.

Originally Posted by Turbanator

Same happened with me, though for April only.

All in all, it will be a loss. I think Banks messed intentionally.

Seems their evil designs are coming out slowly.
Mine is SBI maxgain home loan. I have been paying (auto-debit) my EMI in all these time period.
On April, it was okay. In May, they did not deduct the principal amount from my Limit/Drawing Power. Later part in May, they added the principal amount and some more. In June they added some more amounts to my DP.

It seems like it is very easy for the bank to play around with DP/Limit. If I have not recorded these changes, I would not have been aware.

Today I received a SMS from SBI like this "As per RBI COVID-19 relief package, instalments due in A/c xxxxxx from June -August have been rescheduled. Next instalment is due in September 20."

This is nothing but sheer fraud. I have not opted for EMI moratorium and my EMI's are duly paid during this time.
So in effect, SBI is getting my EMIs as well applying interest and adding back my principal amount as per COVID 19 package.

Sent a detailed mail to my branch and RACPC Koramangala. If it does not work, need to send out tweets to SBI bosses.


Padas, wanted to know if there is any Amortisation schedule for Maxgain accounts and where can we get it from?

[Warwithwheels]

SBI's EBR Based loan Interest rates have dropped to an all time low.

If someone had availed a 30 year tenure loan in 2018 at 8.60% interest, their tenure would now reduce by 10 years due to the drop in interest rate. Thats a 40 Lac savings on Interest!!! The numbers look baffling! But it is true. Hope this trend continues.

Note: The above will hold good only if you continue to pay the same amount of EMI every month.

[fordday]

Originally Posted by fordday

Seems their evil designs are coming out slowly.


Today I received a SMS from SBI like this "As per RBI COVID-19 relief package, instalments due in A/c xxxxxx from June -August have been rescheduled. Next instalment is due in September 20."

Quoting myself.
Is anyone facing the same issue with SBI. They forced EMI moratorium on my account and at the same time collecting EMI. I didn't opt for moratorium in the first place.

[fordday]

Originally Posted by fordday

They forced EMI moratorium on my account and at the same time collecting EMI. I didn't opt for moratorium in the first place.

Again quoting myself.
My EMI is getting deducted regularly but the DP / loan outstanding have not decreased.

Today I visited the SBI branch with a complaint letter mentioning all the details of transactions for my maxgain account. As usual they took cover under covid scenario and refused to answer specifics, saying we will look into.

Then I went to RACPC Koramangala. Their the guy listened to me, accepted the letter and informed that this problem is happening for all maxgain accounts and they will be settling it this month.

Have to wait and see how this plays out.

[bhushan08]

Originally Posted by fordday

Again quoting myself.
My EMI is getting deducted regularly but the DP / loan outstanding have not decreased.

Today I visited the SBI branch with a complaint letter mentioning all the details of transactions for my maxgain account. As usual they took cover under covid scenario and refused to answer specifics, saying we will look into.

Then I went to RACPC Koramangala. Their the guy listened to me, accepted the letter and informed that this problem is happening for all maxgain accounts and they will be settling it this month.

Have to wait and see how this plays out.

Exact same issue, my DP balance is now more than the initial loan.

Went to branch. Clueless folks. Moved me to RAPC. Sent multiple emails. Finally managed to speak with someone. That guy gave exactly same answer, in fact, he said, ignore the DP balance #.

I do check my book balance math to ensure my "closure" amount (i.e. if I were to close my account by pre-paying) is correct. I do this manually by looking at amortisation schedule - principle deduction, interest deducted and interest saved (I've parked additional funds). That matches but I don't know when they will change something in my account w/o anyone in their system knowing why they did it!

And having tasted the public sector bank's infamous customer service. I am not so hopeful of any resolution. One can only keep the maths in check and hope to get rid of the loan asap.

[Dry Ice]

So, some have moved SC seeking relief from the interest due for the moratorium duration.

The battle, launched from Sharma's small shop in the northern city of Agra and now involving more than 120 lawyers, has the central bank and government struggling to defend what was meant to be a helping hand.

The problem, as the other borrowers see it, is that they must pay additional interest on their skipped repayments during the moratorium, which they call "interest-on-interest."

The borrowers - including a leading real estate industry group, power utilities, shopping malls and small businesses - says the scheme unfairly hits them even as many have been financially devastated by the pandemic, that the banks must forgive the interest and compound interest that accrued while their payments were suspended.

The*Reserve Bank of India*told the court an "interest-free" moratorium would cut the sector's income by at least 2 trillion rupees ($27 billion), or 1% of India's GDP. "There would be huge consequences for the stability of the banking system," the central bank said.

The finance ministry told the court last month what waiving what it says is standard compound interest would be "against the basic canons of finance", adding it was crucial to protect the more than 1.9 billion deposit accounts that earn interest income.

Source

[Warwithwheels]

An important development regarding the EMI Moratorium. To read, please on the link below:

...This category of borrowers, in whose case the compound interest will be waived, would be MSME loans and personal loans up to Rs 2 crore of the following category — MSME loans, educational loans, housing loans, consumer durable loans, credit card dues, auto loans, personal loans to professionals and consumption loans,”

Link:

https://www.livelaw.in/top-stories/b...fidavit-163907

https://www.timesnownews.com/busines...atorium/661622

[Warwithwheels]

Some news to Cheer during the Diwali Season. Not sure how much it would translate into in monetary terms.

In a major relief to borrowers amid a global pandemic, the finance ministry has issued the guidelines for implementing a waiver of 'interest on interest' for six months, between March and August. The payments will be made to individual borrowers and small businesses with loans up to ₹2 crore.

Key features of interest waiver scheme:

1) The scheme mandates ex-gratia payment by way of crediting the difference between compound interest and simple interest for the the period of six months — 1 March, 2020- 31 August, 2020.


2) The rate of interest will be as per the rate mentioned in the loan agreement, in case of education, housing, automobile, personal and consumption loans. The rate of interest will be as prevailing on 29 February.

3) In case of credit card dues, the interest rate will be the weighted average lending rate (WALR) charged by the card issuer for transactions financed on an EMI basis from its customers during 1 March-31 August, it said. Penal inteterest and penalty for late payment will not be reckoned as part of the contracted rate or WALR.

4) The lenders must credit the difference between compound interest and simple interest to the eligible borrowers by 5 November.

5) For cash credit, simple interest will be calculated on a daily basis at the rate as on 29 February, 2020. Compound interest will be calculated on monthly basis. The difference between the two will be credit to the customer’s account.

Who will be eligible?

The scheme will also be valid for borrowers who availed the moratorium fully, partially or not at all, as mentioned in the circular.

“While making the calculation, repayments in the loan account during the period to be reckoned will be ignored. This will make the approach of the lending institution uniform for all borrowers, irrespective of whether they have fully availed or partially availed or not availed of the moratorium...." the government notification said.

Source: https://www.livemint.com/money/perso...542258696.html

[saisree]

I tried to read around this new circular on crediting the difference in Compound Interest and Simple Interest on the loans and couldn't get much of it. Any examples here?

[fordday]

Originally Posted by Warwithwheels

Some news to Cheer during the Diwali Season. Not sure how much it would translate into in monetary terms.

Who will be eligible?

The scheme will also be valid for borrowers who availed the moratorium fully, partially or not at all, as mentioned in the circular.

“While making the calculation, repayments in the loan account during the period to be reckoned will be ignored. This will make the approach of the lending institution uniform for all borrowers, irrespective of whether they have fully availed or partially availed or not availed of the moratorium...." the government notification said.

What is surprising here is the highlighted part. It means our crooked banks were charging interest on interest even from those who didn't ask for moratorium.

Like I mentioned before, the outstanding in my SBI maxgain home loan account has been increasing and increasing after May.

Need to visit the RACPC again to have a discussion.

[Warwithwheels]

Originally Posted by saisree

I tried to read around this new circular on crediting the difference in Compound Interest and Simple Interest on the loans and couldn't get much of it. Any examples here?

Please refer to this example:



Source: https://indianexpress.com/article/ex...works-6867882/

Originally Posted by fordday

What is surprising here is the highlighted part. It means our crooked banks were charging interest on interest even from those who didn't ask for moratorium.

Like I mentioned before, the outstanding in my SBI maxgain home loan account has been increasing and increasing after May.

Need to visit the RACPC again to have a discussion.

Interest on Interest (i.e compound interest) will apply only if the interest charged during the previous month is not serviced (read: paid). If you have been regular in your payments, there is no question of Compound interest.

To reward all those who have paid the EMIs on time, the Govt. will notionally calculate compound interest on the balance o/s as on 1.3.2020 till 31.8.2020 and credit the difference between CI and SI as if the EMIs due during the period were never paid.

Hope it clarifies!

[saisree]

Originally Posted by Warwithwheels

To reward all those who have paid the EMIs on time, the Govt. will notionally calculate compound interest on the balance o/s as on 1.3.2020 till 31.8.2020 and credit the difference between CI and SI as if the EMIs due during the period were never paid.

Hope it clarifies!

I belong here to this example, with an additional clause. I used to pay Housing Loan with PNB @8.25% and in the month of September I changed my self to the new interest calculation method @6.95%.
Now when the difference is calculated for the payback what interest rate will be considered?

[Warwithwheels]

Originally Posted by saisree

I belong here to this example, with an additional clause. I used to pay Housing Loan with PNB @8.25% and in the month of September I changed my self to the new interest calculation method @6.95%.
Now when the difference is calculated for the payback what interest rate will be considered?

Quoting a news article from Livemint:

The rate of interest will be as per the rate mentioned in the loan agreement, in case of education, housing, automobile, personal and consumption loans. In case of credit card dues, the interest rate will be the weighted average lending rate (WALR) charged by the card issuer for transactions financed on an EMI basis from its customers during 1 March-31 August, it said.

Source: https://www.livemint.com/industry/ba...520872132.html

The rate of interest as specified above will be reckoned to calculate both SI and CI is what I guess. Let's wait till Nov 5 2020 to see what surprises they've got for us. Just hoping that it is significant enough to cover atleast 50% of the EMI.

[speedmiester]

Just received a SMS from SBI with the following message with a credit of Covid-19 ex-gratia relief. Not a big amount as my loan amount itself is small.
But will be a relief for home loan customers.

[Pequod]

Originally Posted by fordday

What is surprising here is the highlighted part. It means our crooked banks were charging interest on interest even from those who didn't ask for moratorium.

Crooked banks, really?

To illustrate- let us assume Borrower ‘A’ hasn't opted for the moratorium. However owing to unforeseen circumstances on account of the pandemic, ‘A’ has not been able to meet repayment obligations for the months of July and August. As per the loan agreement, the bank would be perfectly within its rights to charge penal interest, and compound interest on the unpaid portion of interest in this case. What’s ‘crooked’ about this?

The RBI dispensation on ex-gratia payment takes into account such a situation and protects the interest of the borrower. In the illustration above ‘A’ had the ‘intention’ to pay - but not the ‘ability’ due to circumstances entirely beyond his/her control - and it is therefore fair and in the way of natural justice that he/she not be discriminated against vis-a-vis a borrower who has opted for the moratorium.

I am not aware of the specifics of your loan, but to generalise all banks as ‘crooked’ because of some unsavoury experience with your loan - that’s going a step too far. Matter of fact, no bank can get away with ‘crooked’ ways these days because (1) the consumer is generally aware of rights (2) there are many options/fora for the consumer to let his/her voice be heard and exercise those rights (3) the supervisory and regulatory bodies almost always side with the consumer, and the onus is on the bank to prove or disprove a claim.

NB - It also goes without saying (in the Indian milieu at least) that while the consumer is 100% aware and vocal about rights, he/she rarely acknowledges the other side of the coin - the one about responsibility.