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home loan rates cut

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Let me start with an apology that I morally owe to the lawyer community, who I thought was the worst in the world. But recently I got to understand that banks plumb depths that even lawyers would find too low to stoop. If ever you come across in a room a top banking official and a black mamba, which is one of the most poisonous snakes in the world, you know what you should do? Exactly, you must somehow save the mamba from the banking official. Otherwise he might levy some random charge on the hapless reptile.

Why do I have such an extreme view of the banking system? Well, allow me to explain: I have a housing loan with a ‘floating rate of interest’, which you veteran loan-holders would know as the official banking term for ‘joke’.

For those of you who are unfamiliar with the floating rate of interest concept, this is how it works:

1) Whenever the general interest rates in the market rise, your bank, quite reasonably, immediately hikes the rate of interest on your housing loan.

2) Whenever the general interest rates in the market come down, your bank, even more quite reasonably, immediately shrugs its shoulders and walks away whistling some random melody.

Seriously, this is the standard operating procedure of banks for years, and only occasionally banks actually announce interest rate reductions for housing loans. On one such rare occasion, when my bank said it was slashing the loan rate, my home loan rate remain untouched. So I called my bank, and after 17 tries I managed what in modern banking system must be a miracle: Speak to an actual human voice. (‘Press 1 for English, 2 for Hindi, 3 for Tamil or you can straightaway press 9 for committing suicide.’)

Anyway, when I asked the customer care executive why my loan interest rate was not cut even though the bank had announced one, the customer care executive told me patiently, “it is a fact that there has been a rate cut. But it is not for existing customers”. ‘Why waste attractive banking offers on an existing customer, who is anyway a certified moron because he banks with us’ is the core policy of all banks.

“Then why call this a floating rate loan, might as well say ‘hey, we fool you interest loan'”, I said, letting my angry sarcasm drip through the telephone line. “Thanks for your suggestion, sir. Will certainly pass it on to our marketing department,” the voice at the other end said, letting his even more stupid earnestness splash down the telephone line.

This was a few years back, and recently my bank announced a small rate cut, and this time I scanned the fine print and found that — some heads would have rolled for this grave error — existing customers too were eligible for it. But as it happened, the loan cut was not reflected in my account.

Again I called the bank, it was perhaps one of my luckier days, as they directly connected me to the bank chairman. Ha. Ha. Ha. Just kidding, I was able to speak to the customer care personnel after several attempts only, and when I asked her why the announced loan cut was not passed on to me, she gave a professional reply: “Must have been computer mistake. Will check and ‘revert back’, sir”. (Q: What do customer care personnel specialize in? Ans: They are experts in ‘reverting back’).

Anyway, the customer care person did not call back, and again I had to phone the bank, and this time the customer care person I got on line said that I had to pay Rs.750 as processing fee to be eligible for the loan cut. Correct me if I am wrong here, shouldn’t we also be allowed to ask for a processing fee whenever the bank hikes the rate of interest? Nah. What happens is the bank doesn’t even intimate us about the hike, it quietly steals the money from our account. That is how shameless they are.

But housing loan banking division will actually come across as being reasonable if you place it alongside the credit cards group. If in a multiple-choice-questions exam, they ask as to who is the most dreaded criminal ever and give you the choices of 1) Veerappan 2) Charles Sobhraj 3) Auto Shankar, you should immediately opt for the un-given fourth choice of: ‘credit card banks’.

Again, I speak from personal experience. Last month I was charged a penal late fee on my credit card even after I had transferred the entire amount due a good 48 hours before the last date from my internet savings account which is with the same bank (as that of my credit card).

When I called the customer care department, a guy told me that internet transfers, even within the same bank, take 72 hours to reflect in the account. In 72 hours, I told him, I could have personally gone to the bank headquarters, even if it was situated in Switzerland, and handed over the money.

Know what the customer care personnel’s response was to this?

Well, give me Rs.1500 as processing fee to tell you what he said. Needless to say, you have to wait for 72 hours.

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