Banks are not bound to inform about changes in floating rate loan interest rates

Floating Rate Loan: If you have taken a loan from the bank at the plotting rate and if there is any change in the interest rates, then the bank is not bound to inform you about it. The National Consumer Disputes Redressal Commission (NCDRC) has said this in one of its orders after hearing a case.

Accepting the appeal of the bank in one case, the NCDRC said that according to the loan agreement, the bank has every right to increase or decrease the floating rate based interest rate. And whenever the bank increases or decreases the interest rates, it does not need to take the approval of the customers because when the borrower signs the loan agreement, the customer consents to any increase or decrease.

The case dates back to 2019 when in the ICICI Bank vs Vishnu Bansal case, the customer approached the State Consumer Commission against ICICI Bank. The customer said in his complaint that the bank increased the home loan interest rates as well as increased the EMI without informing him. The State Consumer Commission passed an order against ICICI Bank and also asked it to pay Rs 1.62 lakh. Apart from this, an order was also passed to give compensation of Rs 1 lakh. Against this order of the State Consumer Commission, ICICI Bank appealed to the National Consumer Disputes Redressal Commission.

The NCDRC accepted the appeal of ICICI Bank and said in its order that the bank has the right to increase or decrease the interest rate of loans taken on floating rate. Because in the loan agreement, both the parties have already agreed about it. In such a situation, there is no need to take approval from the bank again as it is a part of the agreement. NCDRC said that there is no such record from which it is clear that the bank has wrongly increased or fixed the interest rates. NCDRC said that ICICI Bank has also put a notice on the website on the dates regarding the change in interest rates. The commission said that reset letters have also been issued to the customers from time to time regarding the change in the interest rates of bank loans.

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However, the commission ordered the bank to pay one lakh as service charges to the complainant. Apart from this, the National Consumer Forum directed the State Consumer Commission to release the amount deposited by the bank with interest to the complainant.

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