Tuesday, 30 September 2014

First Communication to RBI date Aug 30 2014 -Floating interest rate not reducing automatically in loan accounts

Below shown is my first communication / complaint with RBI regarding banks cheating on floating interest rates. I will update the responses and reply's as follow up blog posts.

Dear Sir,
   I would like to bring to the notice of RBI about a practice of many Banks in India including govt owned banks.

Banks are offering loans in Floating Interest rate to most of its customers. This interest rate is indirectly controlled by RBI and banks make periodic adjustments on this interest rate and it is supposed to get into effect of loan accounts. The problem is ,  Interest rate of peoples loan account goes up automatically according to RBI norms. But it will not come down automatically even if RBI reduces interest rate. For that you need to submit a request in written signed at the bank branch. 
This is followed in most of the banks like State Bank of Travancore , SBI , other private banks etc. Most people are not aware of it, so people are forced to pay more interest rate even if the interest rate of the bank went down.

My housing loan account from SBT faced this issue. Many of my friends and relatives also faced this issue from different banks.

I request Reserve Bank of India to take a look at this issue and take steps to manage.

Ajith George

Co-Founder & COO

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