Frenz, think twice before you apply for a Personal loan with HSBC bank.
The internal procedure within HSBC bank is such that you are always placed at a lesser privileged position(legally) when compared to what you would have been had you proceeded with a nationalized bank.
When you submit any document to any official who operates on behalf of the institution it is mandatory for the official to hand over an acknowledgement/receipt for the same. Why is this convention followed? Suppose that some day the official denies you having handed over him the said docs, in that case, you always have a legally valid acknowledgement/receipt to counter the same. But . this is NOT the case with HSBC. They never issue any acknowledgement/receipts.
Ok, let’s say that you ignore this. Acknowledgement/receipt is not important for you! You go ahead with all the formalities and the loan is about to be sanctioned. but not yet sanctioned. You decide midway that you don’t need the loan and hand over a written request to the official to cancel the loan. The official will not handover an acknowledgement for the receipt of the written request. If you insist he will say "you will have to trust me". Now you are completely at the mercy of the bank. The bank can release the loan money to your a/c even after you have submitted written request to cancel the same . you will end up paying the processing charges. In such cases you will not even be able to log a complaint in "RBI ombudsman" because you have no legally valid document to say that you had placed a written request to cancel the loan amount before the loan amount was released to your account. The official is not to be blamed instead it is the bank itself which has to be blamed.
What can I do about this?
1) Before applying for a loan make sure that the bank is known to give ack/receipts for all the original documents that you submit to them. This is very important !
2) In case of "personal loans" few banks add a separate component to your EMI. This component(which is quite exorbitant) is the premium you pay towards an insurance that will repay the remaining amount of the loan to the bank in case you are not able to pay. Apart from this, bank will also take few blank cheques from you. Do you see there? You are being double checked. In case you have to go ahead with the loan then it is better you convince the bank to opt only one of the 2 - either blank checks for security OR the insurance. Why pay both(or why pay premium for an insurance that is of no use to you?;)