Question: increase in rate of interest of loan against property

[mintoo1970]

sir. i got a loan against my home from citifinancial @ 10%p.a.in 2006 within a span of 2.5 years they have increased the r.o.i.to 14.5%p.a.thus the loan which was to end in 2018 will now end in 2028.please guide me regarding the guidelines on which the banks in general and citifinancial in particular increase the fixed rate of interest in home loan. kindly specify the R.B.I. guidelines for such an increase.also how can i get R.T.I. information from R.B.I. and citifinancial .also suggest a r.t.i. activist and r.t.i.lawyer

[jps50]

Since U would have borrowed with floating rate of interest, lender can increase rate of interest depending upon prime lending rate, which chages with the market forces. First study terms of sanction. If lender [citifinancial is Non-banking financial co-NBFC] is increasing rate as per terms of sanction, U cannot complain. Banks are also doing the same thing as cost of funds has increased. In case if U have opted for fixed rate of interest, the lender cannot chagne rate of interest. If lender is playing illegal tactic, U can send a detailed complaint to its HO. After 30 days file complaint with banking ombudsman of your state by visiting Reserve Bank of India - India's Central Bank. U can refer RTI icon in this website and file RTI appln with RBI. For format pl visit http://www.rtiindia.org/forum/blogs/...govt-info.html. For citifinancial, it being private entity pl refer my blog at http://www.rtiindia.org/forum/blogs/...under-rti.html

[sandeepbaheti]

Although not under the purview of RTI Act, you have the right to seek information from the lender in capacity of a customer.
I advise you to take the following steps:
1) Go through the terms and conditions of the loan once again to check if it was a floating interest loan or otherwise there was any provision for increasing interest rates.
2) If it is a floating interest rate then check with your local branch if interest rates have been correctly applied in your case.
3) If it is a fixed interest rate loan or if you feel that rates have not been correctly applied, write a simple letter to the appropriate person (for details see CitiFinancial ) asking to explain the situation and withdraw any unreasonable charge. Give them 30 days time to respond.
4) If the matter is not solved then take it up with Banking Ombudsman or Consumer Court (I personally prefer the second route).

[abhi987]

Originally Posted by sandeepbaheti

1) Although not under the purview of RTI Act,

2)If the matter is not solved then take it up with Banking Ombudsman or Consumer Court (I personally prefer the second route).

1) They are covered under section 2 (f) of the RTI Act, but access to the required information will have to be routed through a Public Authority, may be in this case RBI (Dear jps50 with banking background can guide more on this).

2) I personally prefer RTI route:

a) Because the respondent has to give a written reply. The respondent will not give incorrect/ false information especially CitiFinancial because the complete event is getting documented.

b) Faster route as compared to Consumer Court.

c) Cost just Rs.10/- and free help in drafting the application from the members of our forum as compared to hiring lawyers.

d) Simplest and easiest way as compared to preparing a case for filing before the Court.

Ofcourse Mr. Bhalla first needs to check if he had opted for fixed or floating rate of interest while applying for the loan.

The interest rates have gone up a lot in the last few months.