Home loan

You have said that they are not returning the processing fee.  Have you sought for refund by any letter?

You may seek refund of processing fee if it is refundable.  The processing fees in loan matters are generally not refundable.  Please verify.

You have stated in the first para that the loan is approved.  Is it now cancelled as you say that you have been asked to reapply?  

The Bank has to profess its standard according to what has been laid down under the RBI Guidelines. The Bank, or the Company cannot behave in a manner it likes. This is a matter of contract and rendering of services for "consideration" as understood within the meaning of Consumer Protection Act. Just obtain all relevant loan papers. Serve the notice to the effect that not releasing the amount as agreed amounts to deficiency in service. File a case before the consumer forum. And, if you would not like to avail the loan due to deficiency in service, ask for the relief of refund. Because the company that commits deficiency in service is not entitled to say that it will not refund the processing fees.