#LIC Housing Finance(LIC HFL), Housing Loan issues, Consumers Beware: Please check your loan accounts thoroughly
1. #LIC Housing Finance(LIC HFL), sets up Unfair Practise. #LIC Housing Finance(LIC HFL), disburses loan to builder over & above demand shared
a. Sanctions loan under Construction Linked Plan(Loan Account no. 14011044260, Appl no. 14309926).
b. Disburses to builder, Rs.17.2 lakhs against demand of Rs.8.8 lakhs on 20th Dec’ 10, ignoring construction progress.
c. Disbursement handled by Area Manager-Gurgaon Office, Krishna Kant Sharma.
d. Excess disbursement evades mandatory checks by technical & disbursement team.
e. Case evades identification by internal audit team
f. Forcefully charges interest from borrower on excess amount
2. On checking ledger account of builder, Borrower intimates LIC Housing Finance on 12th Jan’ 11,regarding error
a. Demand submitted by builder Rs.8.8 lakhs
b. Borrower told to pay Rs.1.4 lakhs towards own contribution
c. Told balance would be funded by LIC Housing
d. Thus LIC was required to pay Rs.7.4 lakhs(Rs.8.8 lakhs Less: Rs.1.4 lakhs)
e. Disburses Rs.17.2 lakhs against required Rs.7.4 lakhs
3. LIC Housing Finance, on Protest by borrower
a. Refuses to acknowledge error & take refund
b. On persuasion & insistence, drafts letter dtd. 2nd Feb’ 11 to builder for refund
c. Again commits error
d. Letter requested refund of Rs.8.4 lakhs against actual refund of Rs.9.8 lakhs
e. Asked borrower to ignore/ accommodate this small error(Rs.1.4 lakhs)
f. Takes plea, drafting the letter again, taking internal approvals, would take time and delay process
g. Borrower accommodates & compromises on this mistake
4. LIC Housing Finance, misguides borrower with some ulterior motive to suppress their errors(represented by Mr.K.K.Sharma)
a. Loan ledger captures refund on 28th Mar’ 11, parked separately,not reduced from Principal Outstanding amount
b. Informs, unless outstanding reduced, interest would be charged on refunded amount
c. Requires to give an acceptance letter, to reduce refund amount from outstanding
d. On acceptance, refund adjusted on 31st Mar’ 11
5. Letter given to LIC Housing to adjust refund from principal outstanding, states
a. Reference refund request to builder by LIC Housing Finance
b. Refund cheque handed over
c. Do needful to get same adjusted to outstanding
d. No acceptance was given to treat it as pre-payment of loan in this letter
e. LIC processes couple of subsequent disbursements on advancement of construction
6. Successor of Mr.K.K.Sharma, Mr.Vikas Gupta, Area Manager-Gurgaon Office, tries to suppress errors of his colleague, further misguides borrower
a. Holds up subsequent disbursements on advancement of construction
b. Informs earlier refund adjusted as pre-payment of loan
c. Pre-payment impacts further disbursement limits, as loan already availed
d. Refuses to acknowledge their error, which led to this refund
e. Borrower forced to take personal loan to meet deficit
f. Informs matter taken up with management, concluded issue can’t be ratified
g. Only solution given is to take a Top Up Loan
7. Non-Disclosure of facts by Mr.Vikas Gupta regarding top up loan(despite borrower agreeing to this compromise of top up at higher rate of interest)
a. Indicates only solution to issue is top up loan
b. Hides actual requirements to disburse top up loan
c. Gets the Top Up loan sanctioned
d. Processing charges debited to borrower
e. Subsequently informs, this can be processed only if agreement signed by builder
f. Builder refuses to sign, stating no cost escalation at their end. States, any error at LIC Housing to be ratified at their end
g. LIC Refuses to go ahead with top up loan without builder signing agreement
h. No reason for rejection of loan given in writing
8. #LIC Housing Finance(LIC HFL), refuses to regularize loan account of borrower, though excess disbursement was an error at their end.
9. Borrower(on non-resolution) forced to transfer loan to another bank, Even issues post loan closure, un-attended by LIC Housing officials(Mail dtd.14th Jul’ 14)
a. Refund not given for excess settlement at loan closure
b. Some documents taken to process initial loan not returned on loan closure
10. Case filed in Consumer Court in Dec’ 13, written submission given by Mr.Vikas Gupta in court in Jun’ 14, claims as below
#LIC Housing Finance(LIC HFL), claims legal right to disburse loan irrespective of demand letter
#LIC Housing Finance(LIC HFL), claims used discretion to disburse loan irrespective of demand letter
a. Takes 5 adjournments in court, stating need time to study the case and then files reply
b. Claims, used discretion to disburse excess amount
c. Claims, legal right to disburse any amount they deem fit
d. Claims, disbursement not dependent upon demand letter
e. Submission indicates an intentional act in excess disbursement
f. Takes reference to a term in sanction letter
g. Borrower forced to take refund of amount they disbursed using discretion
h. Since forced, refund treated as pre-payment of loan
i. Puts before court, Borrower represented false case
j. Appeals to court, Case to be dismissed with cost to borrower
11. Ms. Saroj Malhotra, Back Office Team at Asaf Ali Road & other officials, blocks attempts to counter claims of legal right to disburse(against request to share copy of loan agreement)
a. Refuses to share copy of Loan Agreement
b. Claims it is an internal document
c. Not to be shared with customer
d. Fails to explain, how document signed by borrower, can be their internal document
e. Denies basic right to have copy of what is being signed by borrower
12. Basis a blank loan agreement of LIC Housing, representations made to RBI, NHB on 27th Jul’ 14; Copy forwarded to LIC Corporate office and MD, to counter claims of LIC Housing officials. Facts shared as below, against Regional office:
#LIC Housing Finance(LIC HFL), regional office ignorant towards disbursement guidelines on their web-site
a. Wrong interpretation of terms in sanction letter
b. Ignorance of terms in: Loan Agreement; Tri-Partite Agreement; Facts in FAQ section of company website; General Trade Practise
c. Ignorance of Fair Practise Code approved by LIC board and established by NHB
13. RBI letter no. DNBS.PD.CO.No.841/03.10.001/2014-15 to NHB Chairman dtd. 12th Aug’ 14; NHB registers complaint on 21st Aug’ 14
14. LIC Housing, on corporate office intervention admits error partially as below on 13th Aug’ 14,Around 3 years after the issue surfaced
a. Error in disbursement
b. Wrong interest charged on wrong disbursement
c. Offers to refund just the wrong interest charged
d. Refuses to accept error in refund adjustment as loan pre-payment, impacting subsequent disbursement request of borrower
e. Offers plain apology for issues highlighting, inconveniences/ financial burden/ harassment underwent over 3 years
15. On representation against partial acceptance of error, LIC Housing Corporate Office refuses to look into escalation on
a. Why mistake not acknowledged till date?
b. Why excess interest not refunded till date?
c. Why refund treated as pre-payment of loan without intimation to borrower?
d. Why loan account not regularized earlier, despite error being at their end?
e. Explanation on efforts made by Mr.Vikas Gupta to suppress facts of the case
f. Why issues post loan closure went unattended
g. Why request submitted in court to put cost on me to falsely represent the case
h. Why loan agreement not being shared?
i. Issues highlighted against high handedness of their officials
16. LIC Housing Corporate Office, intimates over phone, that they won’t look into it as matter is under litigation, takes stand
#LIC Housing Finance(LIC HFL), lets the perpetrators of the issue, manage & supervise the legal team handling case and respond on behalf of company in court.
a. Legal team only would handle case in court
b. Fails to explain how they can let the very perpetrators of the issue, represent company on the complaint filed
c. Refuses to comment on a case presented towards “Case of Negligence vs Unfair Practice” of their regional office in connivance with Disbursement & Technical teams
17. LIC Housing ignores to disclose actual facts to regulator – NHB by hiding actual facts,(on complaint registered by NHB on 21st Aug’ 14)
#LIC Housing Finance(LIC HFL), hides actual facts of the case from regulator-NHB, to get a complaint closed
a. Error submission to borrower by LIC on 13th Aug’ 14
b. Hides error submission from NHB, reply to complaint dtd. 21st Aug' 14
c. Informs NHB, matter pending for “evidence submission” in court
d. NHB closes complaint stating, LIC reverted to complaint:
Borrower Closed loan on 19th Jun’ 13 & collected the documents
Court complaint is at stage of “Filing Evidence” on behalf of LIC
Since LIC reported as above, and matter is under sub-judice, closing complaint
e. On date of case listing in court, against courts order, basis request from borrower asking LIC Housing to produce before court the loan agreement, to counter claims of LIC Housing, they
Do not provide any evidence
Accepts there were errors at their end
Asks for opportunity to have mediation
States not sharing loan agreement, as they are accepting errors at their end, basis claims of borrower
18. It is worth noting at this point, that below are some of the ethical practices required to be followed by LIC Housing basis the Fair Practices code Established by their regulator - National Housing bank, and approved by the board of LIC Housing, as expected to be followed/ adopted by their officials:
a. NHB Code 2(c): HFC’s dealings with customers to rest on ethical principles of integrity and transparency.
b. NHB Code 3.1(g): HFC to take appropriate steps to investigate/ handle complaint, Make good the loss on receipt of any complaint from the customer, that HFC’s representative has engaged in any improper conduct.
c. NHB Code 4.1(i)(a): Loan application form to indicate list of documents required to be submitted
d. NHB Code 4.1(ii)(c): HFC’s shall invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement, to every borrower at the time of sanction/ disbursement of loans.
e. NHB Code 4.1(iii): If an HFC cannot provide loan to the customer, it shall communicate in writing the reasons for rejection.
f. NHB Code 4.1(iv)(a): Disbursement of loan should be made in accordance with the disbursement schedule given in the loan agreement.
g. NHB Code 4.1(iv)(e): HFC should release all securities on repayment of all dues or on realization of the outstanding amount of loan.
