NCDRC Judgment On ICICI

When borrowers take out loans with floating interest rates, banks are not required to notify them of any changes in interest rates. The National Consumer Disputes Redressal Commission (NCDRC), New Delhi, highlighted this in a recent verdict on a dispute between ICICI Bank and its customer.

"A bank can increase or decrease the rate of interest under the floating rate of interest offered for in the loan agreement executed between the bank and the complainant and any additional or even further consent from the complainant was not required, as the same having been agreed to in the loan agreement itself," the NCDRC presiding member Dinesh Singh and member Karuna Nand Bajpayee said in setting aside a state consumer court order that had upheld the contract.

Facts 

The case's history may be seen in 2019 when the aggrieved customer filed a complaint against ICICI Bank with the State Commission in New Delhi. The consumer claimed that the bank had extended the term of his EMI payments and raised the interest rate on a house loan without notifying him. The State Commission ruled against ICICI Bank and ordered it to pay Rs. 1.62 lakh, plus interest, as well as an overall sum of Rs. 1 lakh in damages and costs. Angered, the bank appealed the decision before the NCDRC.

NCDRC order

The NCDRC supported the bank's appeal and stated that, by the variable rate of interest stipulated in the loan agreement signed by the bank and the complainant, "the bank was entirely within its rights to increase or lower the rate of interest." According to the NCDRC order, the complainant's additional consent was not necessary because it had previously been made clear in the loan agreement.

The order further stated, "There is nothing on record to demonstrate that either the bank had established the rates of interest in any way that was incorrect, contrary to the appropriate rules and guidelines, or had differentiated between comparable positioned borrowers in this respect."

Findings of deficiencies or unfair business practices on the part of the bank cannot, therefore, support the aforementioned ruling.

Customer appeal

NCDRC additionally noted that the bank had published notices of the modification on its website on relevant dates and also mentioned the dates on which reset letters were occasionally delivered to the customer appeal.

Banks appeal was granted

The bank's appeal was granted, and the bank was ordered to pay the client an amount of Rs. 1 lakh merely as a "goodwill and service gesture" without accepting or admitting "deficiency."