I am an unfortunate and unwitting customer of Standard Chartered bank who is regretting having availed a loan from the bank in 2003. My story is as follows:
I had taken a floating rate mortgage loan from Standard Chartered bank in December 2003 at an interest rate of 7.50%. Recently the bank intimated me that the interest rate stands revised to 13.75%. With this revision, the interest rate on my loan has gone by more than 80% from 7.5% to 13.75%
1) In the past five years, the Bank has increased interest rates over six times.
2) As a result of these rate increases, my monthly EMIs have increased by35%.
3) Further, my loan tenure has now gone up from 20 years to 41 years. So I will finish re-paying this loan when I am 68 of age!
4) Speaking to the bank on the high interest rates is of absolutely no use as they take refuge under "Bank’s Policy" . And if you do not pay up their EMIs up get chased by collection agents and get reported to the credit bureau
I decided I will look around a little bit and see what is happening inthe market currently:
a) I found out that the very same Standard Chartered bank offers floating rate rates for the same tenure/amount at 10.75%. Is this not a restrictive trade practice? or this is once again the bank’s strategy to trap gullible customers
b) A pre-closure of the loan invites a shocking penalty of 2.50%, which means the effective interest rate goes up even further. At the same time, other bank allow customers to pre-pay
c) Several banks are currently offering customers loans at between 9.75% -10.75% for a similar tenure/ amount
d) during the period 2003-2009, RBI’s interest rates have gone up and come down- I do not recollect a single reduction in Standard Chartered bank’s interest rate. The bank’s policy appears to be **"Interest rates are high or low, the Customer loses and the bank always profits!"
Lesson learnt: Do not be trapped by initial promotional offers/discounts.Instead look at the long term cost/benefit of different offers before deciding.I’ve learnt my lesson, albeit in a costly way. I am not sure if I can do anything except voice my grievance. Is there anything else I can do?
As for Standard Chartered bank, are they helping me "meet life’s challenges on my terms", as their website claims or are they loan sharks who are driving middle-class citizens like me into financial distress
*Post-script(Feb 7th)
After 10 days of having brought this to the bank’s notice, it is amazing that I have not yet received any response from SCB. **Talk of bad service being the worst topping for a lousy product!