When you take a personal loan from any Foreign or Indian Private Bank including ICICI, HDFC, Kotak Mahindra, please be sure of the fact that they have decided to cheat you right at the very outset itself.
When you take a loan, you are given a cheque which is normally dated for the second or the third week of the month. By the time the money is in your account, it is the end of the month.
And as per agreement executed by you, the bank is now ready to take back the first installment. This is where the cheating happens.
First, the bank does not give you the full amount of the loan, deducting the processing charges at source along with the service tax and all other levies.
Secondly, the bank takes back the first installment in the first week of the month that follows the disbursal date. Therefore in effect you are paying back the bank interest on the entire amount within 7 to 10 days of getting the loan.
This is a standard sharp practice deployed by all the banks other than nationalized banks.
With nationalized banks you may face a delay but they will never cheat you. Do you know why? Because promotions in Nationalized banks are not linked to returns generated by an individual. Whereas in MNC and Private Indian Banks, fresh MBA's are hell bent on increasing the profit of the bank in the hope that they will be able to climb the ladder of success faster, and they do!
KV Kamath takes home 10,00,00,000 per month as salary, how is that for success! He also holds stock options in the bank that he is heading. Do you think the owners of these banks pay these salaries?
If you said yes, you are completely wrong. It is the customers of the bank that make it possible for the company to pay Mr. Kamath the salary quoted above. And what does Mr. Kamath and his team do? Find new ways of cheating the customers that are paying for his salary!
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6 comments:
You are absolutely right. But, come 2009, all these nationalised banks will be bought by these Private Multinational Banks. Even the ICICI bank...which we think it to be an Indian bank but you would surprised to find it have Foreigners holding equity about 43 percent and above.
Not only banks cheat their customers, in fact almost all the private financial institutions in India are cheating their customers and the Regulatory Authority in India is toothless and spineless..may be they might be getting some share from the loot.
Aviva sent its executive with a Tag of Insurance Consultant, he turned out to be a fraud...of course, on his suggestions then not having enough understanding about the insurance concept I invested but sooner when I understood what I have done...till the time it was too late for me to revert. That executive now hace changed his mobile mumber and is not avaialbe. This is the credibility of the financial institutions in India.
What you say is so true.
There is actually a book by W.K. Black, The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry, University of Texas Press on this subject.
Insurance is the biggest fraud committed on the people of India and LIC is in the forefront of this.
The so called insurance advisors don't know their elbow from their ass. No wonder you got taken in with all their sweet talk and benefits of insurance. They only people to benefit from Insurances are the companies that are issuing them! The sooner we realize the better.
Fortunately our system of joint families has survived leading to fall back support in the event of difficult times. We all need to build these institutions and invest our time and effort in making them work.
ICICI by far is the most crooked of the institutions. And actually ICICI is not owned by any one but a combination of foreign fund houses and investors. People feel ICICI is still the Industrial Credit and Investment Corporation of India and owned by the government. In fact government after successive governments have failed to educate people about this fact.
Poor common people still have faith in ICICI assuming it to be owned by the government.
I am a banker myself, so know how the interest is calculated in the system.
If you were disbursed the cheque on 25th April, and EMI cheque hits on 10th May, you will be charged for only 15 days and not for the full month. The effect is given in last EMI cheque, which is normally lower than EMI amount, provided interest didn't change in between.
Private Sector may want to earn more, and there may be attempts to play with the system. But our regualtor (read RBI) is so strong that Banks can't play fool at systemic level.
Being Cynical is very easy, but working on a system with an eye on improving it is difficult. Its so easy to write "Regulatory Authority in India is toothless and spineless" without even thinking of why all surveys and experts rate RBI and SEBI so highly. If they were not effective, managing such a difficult economic trajectory won't have been possible.
Hi Anshul,
Exactly my point with ABN Amro but they refuse to consider this fact.
This has happened with me in person, they refuse to accept the logic that you have given and have charged me for the full month! Now when I threatened them with going to the Banking Ombudsman, they come back to me and say that purely as a service gesture they are willing to refund me some money (how much, they don't know).
My point is that they are doing this routinely to everyone and when it is done systematically does it not amount to cheating?
By the way, which back do you work for (let me guess... Kotak)?
Thanks for writing and clarifying the issue from an internal perspective.
Regards
RBI and SEBI may be some of the finest of organizations but what they lack is that they do not yet have MBA's managing their affairs!
Eventually it will take a thief to catch a thief, if you know what I mean.
Thanks for writing
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