I have applied for a personal loan with a private banker. After applying the loan and  sumitting all the documents, I got the loan sanction letter and fine print agreement which I have signed duly on all the dotted lines.

When I received the disbursement check I was shocked to see as they have pre-closed one of my existing loan with the bank using the new loan amount. Fine print was cryptic on this term and it was never explained to me.  Say the pricipal outstanding was RS 50, 000 and interest RS 2,000 of the previous loan got paid and loan account got closed. Because of this premature closeure, I lost around Rs 15,000 as bonus from the previous loan, which I could have recevied.

When the new loan check was given to me, looking at the disbursement amount I declined to receive the cheque, but the direct sales executive pushed it to me and vanished.   I went to the bank and gave the check to the customer care and asked to cancel the loan. I have not availed a penny from the new loan, except the amount the utilised to close my previous loan

Now the banker says, there is nothing like cancellation of loan. Though I have not  used the disbursement check  and previous loan is closed pre-maturely I am not eligible for the any of the benefits and I need to pay up small interest charge on top of losing bonus of my previous loan.

I found out there is a cooling period for Personal Loan agreement in other countries( CCA in UK ) very similar to Insurance agreements. 

Do we have any such provision in India's consumer credit act ? 

I am not sure how much RBI/Ombuds scheme will protect consumers in India. Banks donot give the customer's copy of agreement immediately after signing the agreement. RBI is cautioning consumers about it  at their website instead of telling  the banks to act legitmately.

If someone share your thoughts on the above question under these scenarios, It will help me  in belling the cat. 

Thanks

Siva