Monday, October 8, 2007

Axis Bank- UTI Bank- Home Loan- Hidden Charges and Frauds


This post is to enlighten people who are about to take home loan for the first time and do not know the intracacies involved in financing.

I had a bitter experience with Axis Bank (formely UTI Bank) but in the process I came to know the nuances involved and how strong reaction/followup can really prevent the dejection on the customer end.

To start with Me and my wife visited a newly launched property in Indirapuram. Axis, HDFC, BoB and ICICI was pre-approved banks. My need was maximum financing of 90%. I was not aware about any charges and hence was curious about knowing from various vendors. All banks except Axis Bank told me that as per RBI Guidelines it would not be possible for them to finance 90% but they can try anywhere above 85% based on profile. Also processing charges was Rs. 5618 and apart from there was absolutely no hidden charges.

An agent from Axis Bank studied my profile and assured me that he would give 90% and Rs. 5618 would be charged as processing charges. I was bit amazed but then with free insurance and other stuff I thought to give Axis Bank a try as they said YES to all my conditions.

2 weeks passed by and one fine day i reeived my sanctioned letter. Two points attracted me to sanction letter. First the max limit approved was about 92% based on my profile (by the way this is the upper cap and not the disbursal amount). Second and most shocking was 1% processing fee which was not told to me earlier. To make the matter worse they encashed my Rs. 5618/- cheque also.

After sanction letter they called me up and told me that they could provide only 89% finance and 1% processing fee is mandatory (which was about 30k in my case).

I took a back seat and said since the retracted on both conditions and hence I am not interested in taking loan. More disheartening was the fact that they had gone back on their commitments and I had no faith left in the bank.

Sensing my hard attitude they asked to agree on 89% and to mention in the sanction letter that Rs. 5618/- would be the charges and I wont pay more than that.

After much persuasion I agreed on 89% and Rs. 5618/-. They made me sign all documents and took all papers.

After a week I got another call and gave me two options

1) Agree on 85% and charges of Rs. 5618/- or
2) Agree on 89% and charges of Rs. 30,000.

I was in trouble as they already taken 30 days of 45 days in which payment has to be deposited with builder and on top of it they were not returning the papers too when I told them that I am not interested.

I raised my voice to all levels and since trust was broken my point was clear" I dont want to deal with Axis Bank". To add an insult to injury they were not returning my paper and kept on delaying it. I was not told whom to contact and they stopped to answer my calls too.

Since it was end of month one fine day they called my up and told me that my loan is approved on 89% and Rs. 5618/- as processing charges at 11%. I said NO and that I am no more interested. My plan was to engage HDFC as I was fed up of people of Axis and from their attitude of keeping people in ransom.

They tried to convince me but I asked them to give my papers. Finally I was asked to collect it from Aruna Asif Ali brach in delhi but when I visited that place at 10 in morning I was told that my loan has already been disbursed.

I objected to sanction and told them to give me back my papers. The co-ordinator told me that loan is disbursed and in order to cancel it I have to pay interest charges. This made me angry and I started to question the bank on almost everything. On other end I was told that DSA involved has declined any sort of conversation and on top of that he is asking me to show up the papers where i has declined the disbursement.

After 4 hours and much I waiting I banged into conference room to talk to their Head (by the way no one from Axis Bank was allowing me to meet him). Head was good enough to give his time immediately. I explained the whole case and the owner of DSA was also called there.

The Head of Retail asset branch at aruna asaf ali branch then studied my case from all scenarios and assured me that nothing will happen from now on. He told me that 89% at 11% charges with Rs. 5618/- is final and that nothing would be asked from now.

Since head was saying that I finally agreed and came back home. But the main point still remains "even though the head of retail asset assured me that processing fee of Rs. 5618/- would be final, it has been 10 days and I have still not recived the same in written format as was agreed by him".

I am not sure of next step but I am prepared to take it to conclusion.

PS.- Names have not been reveled as I strongly believe that its the system which has a problem rather than individual people. People are merely means to a process established by an organization which is Axis Bank in this case.

Leave your comments in case you have doubts.
                                                             

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16 comments:

Amit Ahi said...

I have experianced exactly same thing for the plot at Indrapuram. I had also raise the same concerns of Rs 5618 is going to charged or 1%. I was again and again assured that 5618 will be charged.

When i got the loan and now i have statement stating the loan amount and interest section for tax rebate. It showed me correct values. I recheck after looking at yours post here, since i also became tense that I am suppose to pay Rs 5618/-for processing.

Anonymous said...

Thanks for the post. It helped me to be on my toes throughout the deal.

PRABJOT said...

HI...I read on the net that as on Oct 6th 2007 Axis Bank reduced the ROI from 11% to 10.5% for new & existing cutomers. Were you still charged 11% ROI? Link - http://in.biz.yahoo.com/071006/203/6lmjr.html
Im also deciding between HDFC & Axis Bank for a home loan. Axis is offering at 10% & HDFC at 10.25% (Processing Charges for both they say is 5618). Not really sure whihc one should I go ahead with?

Anonymous said...

Hi Thanks for making us aware of all this. I'm also going to deal with axis bank as they are offering me rate of interest 10% and madetory insurance of @5000.

But the thing I learn from your experience is I'll not accept any thing unless its given in written in full details. I've made a list of all that heads of charges which bank can use from different posts and I'll ask them to fill the amount there in written either N/A or nil before I submit my documents to them.

Tarun said...

Even I am having an extremely disheartenning and sad experience with Axis bank. Though the interest rate appears low there are hidden charges like Stamp Duty of Rs. 15000/-. I have not heard about other banks charging this. But the main issue is they outsourced the documentation part to this company called Semtofin. That was the beginning of the misery. First of all it appears like they don't know what all documents to be collected, who is a co-applicant, who is a guarranter, where all signatures are required. It has been two months since I applied for this takeover loan and it has not been disbursed yet. They have been to my office and home atleast 15 times and even today they are asking for more documents.

To add to the agony Axis has issued my DD a week back and they are charging me interest on that but still it has not been submitted to the other bank, on a daily basis I am paying more than Rs. 1000/- of interest.

I fell for their lower interest rate (which anyway it is not anymore)but the frustration that has caused makes it worthless. My adjacent neighbour got it done through HDFC and got the disbursement on the 14th day.

I would recommend to think twice about going to the Axis bank for home loan. Their process is extensive,unexplainble and inconvenient.

Tarun

Vijayan said...

Thanks everyone to add you views & experience with Axis Bank. Is someone help me to prepare a checklist before I approach them ? I am in process of purchasing flat and I heaerd all good words abt interest & other features. So for I was not hear'd anything abt stamp paper cost. Please add your point to help to understand more to get a housing loan.

Thanks,
Vijayan

Neeraj said...

I also had a bad experience to egt the loan disbursed through Axis Bank for a property at Ghaziabad. I had finally opened a case against them at Consumer Forum which was settled in my favor and also the according to them , the DSA agent, who promised 100 lies to me, was sacked.

Anonymous said...

thnx a lot i was going to open my account in axis bank

Sanga said...

My experience was muct worser than you boss. Useless bank in the world. All the managers in the bank are real useless guys...they are like donkeys.

Sorry for venting my frustation here.

Anonymous said...

Recently I've become a victim of AXIS bank, I've taken a huge loan amount of 39Lakhs (including wood work) at 11% last july '08. This is the time I need to pay my last demand note to the builder for registration. Now I got a shock from the bank saying, I was only allowed to use 35.5L for House and 3.5L for wood. Where as it is promised that 36.5L for House and 2.5L for wood work. When I go back to the bank with the written proof which I have from the DPC (Semtofin), Bank says they recently closed all the relations with this DPC, they can't do anything further!

Please Don't believe in AXIS or its DPC..

Regards
KK

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Anonymous said...

Sorry for my bad english. Thank you so much for your good post. Your post helped me in my college assignment, If you can provide me more details please email me.

axis bank cheating home loan customers said...

I have home loan in axis bank, the interest rate is very high. I took the loan in 2008 and i am being charged 12% ROI while a new home loan from axis bank comes at 10.75% ROI. Isn't this cheating............

Ashlesh Sharma said...

this information on home loan is totally unique and other best thing is that the entire information is based on reality.
icici india home loan

paramvir singh said...

Good step to improve the customer knowledge for the .axis bank home loan. keep posting the relevant information.

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