ICICI Bank fined for hiring goons.. *Long rant ahead*
This was waiting to happen. ICICI Bank had it coming, they were asking for it. Though very much delayed (after many incidents of suicides by customers, routine violence and threats against customers, and consumer court cases), it is still a step in the right direction. RBI norms are flouted with impunity by ICICI Bank (I wonder why ICICI Bank is still the darling of the stock markets, they have a very bad image in the retail market. I guess, its their corporate lending thats doing well).
I was hoping for much stringent action against them, based on many incidents that I have come to know of, via the papers, friends, relatives and acquaintances.
Once, due to some delay in processing by another bank where I have an account, an EMI for a loan that I had taken from ICICI failed due to a failed transaction. Yeah, I had taken a loan from ICICI *shamefacedly*, I wasnt much aware of their bad practices. Sadly.
I was unaware of the failed transaction (I did not check my account balance for a week). One fine Sunday morning at 0730 am (yes, Sunday 0730 am! The time to sleep away the hangover) after a week from the due date, I got a call from their goons, who talked in filthy gutter language so typical of the slums of Mumbai. They said that I have not paid my EMI, "kaykoo nahi paisa bhara", "kab derela hai tu paisa", etc. I was half-asleep, so I told them to call after an hour. They called after half-an-hour instead. I told them that I will first check my account, talk to my bank and then talk to you. I again got a call at 11am or something. By that time, I had confirmed with my other bank (phone banking was working on Sunday), that the processing was delayed due to late salary payment and weekend on 31st and 1st. As per the transaction print from the ATM, ICICI Bank tried to withdraw money early in the morning, while my salary was deposited later in the day. (What kind of f**king bank tries to withdraw money at 8 am morning?). I agreed to pay by cheque. The goon at the other end insisted that I pay by cash. I refused. Finally he agreed to a cheque (dunno why he needed cash). He also asked for some Rs 250 fine for late payment. I refused that, since the bank contacted me late regarding non-payment of EMI.
First of all, I had mentioned the withdrawal date as 4th of the month, while filling up the forms. Still, ICICI bank is dumb (or malicious) enough to set it to 1st of the month. I called them twice to change the date to 4th, much before this incident, but still they have not done so yet (of course, it gives them a chance to extract late fines from salaried customers, they wouldnt do that).
After that, why the f**k did the bank wait for a week before contacting me regarding the failure of the transaction. After waiting for a week, why the goons first (that too, on early Sunday monring)? Normally, if the bank should have contacted me first, and then send in the goons. Just proves what ICICI bank thinks of their customers. This also reinforces what the customers think of ICICI Bank is true.
The bank treats the retail loan customers as if they are defaulters first. There can be any genuine issue on the customer's side, like in my case. Its not like every customer of the bank is out to default and run away with the bank's money. Of course, the customer has to pay. I was willing to pay. I would have promptly paid earlier if they had informed me earlier. But getting goons to harass the customer is no civilized way of dealing.
Another case I know of involves a friend of mine, who changed his job and address. He informed the bank of the same, and also completed the formalities of instructing the bank to withdraw from another bank account instead of his current one. Still ICICI bank tried to withdraw from the same account next month, sent goons at his old address (where they came to know of his new address) and sent him a legal notice !!
Also, ICICI Bank is the biggest cheat when it comes to EMI calculations, hidden charges, and setting interest rates.
In short, your interest rate has two components. Benchmark rate and Markup rate (the exact terms may vary). For a customer, the markup remains constant, while benchmark rates vary, in case of floating rate loans. When interest rates were rising, the bank increased the benchmark rates. When interest rates were going down, the bank did not lower the benchmark rates, but offered higher negative markup rates to new customers. So existing customers continued to pay higher interest rates. By definition, a floating rate loan means the interest rates charged from the customer must be lowered when interest rates go down (whatever the reference rate is, as decided by the Reserve Bank). But the bank used this markup rate technicality to cheat customers. At present, ICICI bank charges the highest rate of interest from existing customers, even HDFC and SBI have <a href=" http://www.business-standard.com/banking/storypage.php?leftnm=lmnu3&subLeft=1&autono=300549&tab=r ">reduced their floating loan interest rates</a> for existing customers as per the market.
Some things I have noticed about ICICI Bank -
- They are the most prolific users of goons. Most incidents of bank goons (euphemistically called recovery agents) involve ICICI bank. And this, when most customers tend to avoid ICICI bank because of their very bad market image in the retail loans segment.
- Most people in the industry I know, avoid dealings with ICICI Bank. Many colleagues have called it untrustworthy.
- The employees at the counter are mostly dumb and inefficient. The way they talk, they hardly seem to have any degree. Many of them seem to be the same goons who call up people and abuse them. Same goes for their phone banking service (though not goons). Go to any HSBC, Barclays or ABN Amro branch and you will see the difference in the quality of the employees.
- Most of the times, your requests for even simple things like change of address or phone number, cancellation of cheques, change of the source bank for EMI withdrawals, etc are not understood properly by ICICI Bank. (Or they feign ignorance. It gives them an excuse to earn money via late fines, etc).
- Their services are slow. Once I visited a Bank of India branch (a sarkari bank) for a demand draft. They seemed to be much faster than ICICI Bank and the much hyped another sarkari bank SBI (State bank of India). I got it in 10 minutes flat at BoI, while you have to wait for atleast that time in an ICICI bank branch before your turn to visit the counter.
- ICICI bank branch premises are very often unclean and disorganized. Sometimes, even ACs are not working or ineffective. I have found malfunctioning ATMs most often with ICICI bank (even though it is not my primary account, and it is less frequently used).
- ICICI Bank ATMs are out of cash many a times. Or they are out of currency of particular denominations.
- ICICI Bank hiked my EMI twice in last two years. In one case, they sent a letter 3 months after they did so (and after I had called up ICICI to confirm why more money was being withdrawn from my account), and in another case, there was no intimation. Not even an email informing the change, even though they send atleast one spam email a day to me. ICICI bank will not inform you (or inform you late) about any changes in the terms.
Please let others know about ICICI Banks unethical practices.
I am not against private players in banking, but they sure need to comply with norms. Apart from norms, there are some things called civilized behaviour, business ethics and honesty. ICICI bank needs to learn them, to retain whatever trust they have left in the market.
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