Date:25/09/2008 URL: http://www.thehindubusinessline.com/2008/09/25/stories/2008092551970600.htm

ICICI Bank customers have problems with ECS mandate

Resent being branded defaulters for no fault of theirs.

G. Naga Sridhar

Hyderabad, Sept. 24 Mr Prasad Rao, an employee of BHEL, was busy with guests at his daughter’s first birthday party.

There was one uninvited guest, a collection agent from ICICI Bank, who wanted Mr Rao to pay Rs 22,000 towards the EMI of his housing loan which had already been debited from his account three days earlier!

This is just the tip of the iceberg. The ECS deductions of ICICI Bank are turning increasingly erratic, causing retail customers inconvenience, embarrassment and mental agony for reasons ‘unknown’ to the bank, according to information available with Business Line.

“I had taken a two-wheeler loan from ICICI Bank in May 2008. A proper ECS deduction mandate was taken from me by the bank. Till now, only two ECS deductions were made from my account, though there have been sufficient funds,” Mr Parasuram, a lecturer with Osmania University, said.

The matter does not end here.

“From the very next day, the call centre/collection executives start pestering you for no mistake of yours. I tried explaining to them that there were funds in the account and that the problem was with the execution of mandate over which I have no control,” he said. Further, a customer would be branded a ‘defaulter’ with a cheque-bounce fine of Rs 250 per month.

And, if somebody is strong enough to resist the unwarranted harassment from collection agents, he will be made to pay a heavier price at the time of loan closure.

“In my loan duration of 18 months for a bike, six times ECS deductions did not happen and I refused to pay the fine. But to get a no-objection certificate from the bank, I was forced to pay that with interest for one year,” Mr Raja, a software engineer with Computer Associates, said.

Apart from the embarrassment and distress, a big blow to a customer is the adverse impact on his/her credit history.

What is the recourse, then? “It appears that there is no way out other than approaching the Banking Ombudsman as ICICI Bank did not respond to my complaint for the last five months,” says Mr Parasuram.

“We will look into all these complaints if somebody formally complains to us as per the prescribed procedure,” Mr M. Sebastian, Banking Ombudsman (AP), told Business Line.

Business Line’s efforts to get an official statement from ICICI Bank on the issue were not successful as the bank did not respond. Some names of the respondents in this report have been changed.