Complaint Rating:

My name is Saravanan. U residing in Chennai, I am a Customer of Kotak Mahindra Bank. I was left with no option other than escalating my problem to the Complaints Board.

I have a personal loan with Kotak Mahindra bank my Personal loan number is SPL - 43683 agreement dated 26th December 2006.

The Loan Amount was 3,02,581.00 and the EMI was Rs.10590.00 at the rate of Interest 15% for 36 months. the EMI started from January 2007 and I was a regular payer and there was no defaults so far. During sometime last month I was approached by Kotak Mahindra Bank's Sales executive Mr. Karthik (Mobile Number:+91-9841036775) asking about the Loan top-up. I too had a need of money due to my brothers marriage which was in the near future.

I applied for a top-up for 2 lacs, Wherein the Bank's sales person committed me that he will get me the best interest rate. I was given an agreement on 29th Jun-07 for 5 lacs for 36 months and the interest rate was whooping 18%, and there was a loss of Rs.25000/- for me (Interest paid on the old loan). So I rejected the offer. At the time of applying all I understood was the top-up loan will be either a new loan apart from the earlier one or an extension of the old loan. (The sales person failed to inform me that the old loan will be closed and this will be entirely a new loan). Then the same day I was contacted by Mr.Velu (Mobile Number:+91-9841426423) who claimed as the Manager for the personal loan division of Chennai.

He promised me that he will give me the loan for 16% and the EMI will be 17578/- and also he will waiver me the Insurance cover and there will be a 2% service charge for only the extra loan amount with service tax. So my loss will be minimal. I asked him twice and he said I have to trust his words as a manager.

Commitments made by Mr.Velu.

1. Service Charge of 2% for 2 lacs (Loan Amount Availed Extra with 12.25% Service tax on that).
2. Interest Rate at 16%
3. Waiver of Insurance Cover and other Charges.

So based upon his commitments even though there was the loss of Rs. 21,412.00 Interest I have paid for the old loan I decided to go for the new loan and signed the documents.

When the Cheque was credited in my Account, I was traveling and I was shocked because the Amount credited was Rs.2,08,942 Via CHQNO:045168 on 04/07/2007

But I was promised to get Rs. 2,33,000.00. I have enclosed the calculation Sheet for your perusal.

Loan Amount

New Loan: 2,00,000.00
Pricipal Outstanding from Previous Loan: 41,519.00
Total: 2,41,519.00

Deductions:

Service Charge of 2% on the Loan of 241519.00 : 4,830.38
Service Tax on the serv Charg at 12.25% : 591.72
Total Deductions : 5,422.10

Net Payable was to be Rs.2,33,096.90

I was cheated (I would consider this as an appropriate word) Rs.24154.90 by Kotak Mahindra Bank people.

I contacted the Customer Care division immediately and inquired for which they told me that the approved loan amount is 4,97,000.00 and the rest as service charges, Insurance and Handling Charges. I spoke to velu and Karthik and they said that they will get me a clarification but failed to do so. I would Have tried more than 100 times and have even sent SMS messages but they are not bothered to give me an proper answer. I escaped this problem to Mr. MohanRaj who claimed himself as an Regional Manager (Mobile Number: +91-9841072251), He was also is non-responsive. Even though the loan amount is 4,97,000 I was supposed to get 2,30,096.90 but I have received only Rs.2,08,942.00.

I received the loan details and papers yesterday after making several calls to the customer service number : (044) 42245544. I was shocked to learn nearly Rs.11,168.00 was the service charge and service tax with Insurance cover of Rs.3,510.00 and documentation charges of Rs.841.00 and handling Charges of Rs.1150.00. (What is this handling charges I really don't know).

I have made several calls and have requested for explanation but no in the bank bothered to answer my calls.

Kotak Mahindra bank has failed to follow the Code of Fair banking Rule and they have imposed huge charges without prior notice and also they have provided wrong information and false commitments.