Extending Tenure Of EMIs And Reducing EMI Amount Without Consent, Chandigarh District Commission Holds HDFC Bank Liable

Brief Facts:

The Complainant procured a credit card under the persuasion of the HDFC Bank. Responding to the enticement, the Complainant agreed to avail of a loan amounting to Rs. 80,000/- at an interest rate of 18.84% per annum, repayable in 12 equated monthly instalments (EMIs) of Rs. 7366/-. The bank disbursed the loan to the Complainant and the Complainant started making monthly payments. However, in November 2023, upon looking at the statement of account, the Complainant discovered that the bank was debiting EMIs amounting to Rs. 4021/- instead of the agreed-upon Rs. 7366/-. Subsequently, the Complainant brought this discrepancy to the attention of the bank, initially through an email which was followed by a reminder. In response, the bank, via email, informed the Complainant that he applied for a 24-month loan without furnishing any documentary evidence.

Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-II U.T. Chandigarh (“District Commission”) against the bank. The bank didn't appear before the District Commission for the proceedings.

Observations by the District Commission:

The District Commission referred to the Complainant's affidavit and noted that the Complainant availed a loan of Rs. 80,000/- from the bank at an interest rate of 18.84% per annum, with an agreed repayment schedule of 12 EMIs at Rs. 7366/- each. The District Commission noted that the bank without seeking consent from the Complainant, unilaterally extended the tenure of the EMIs from 12 months to 24 months, and concurrently reduced the EMI amount from Rs. 7366/- to Rs.4021/-. Despite the Complainant's repeated requests, communicated through emails, the bank did not rectify this discrepancy by rescheduling the EMIs back to the agreed amount of Rs. 7366/- per month.

The District Commission noted that the bank also didn't appear before it. Consequently, in the absence of any counterarguments or rebuttals from the bank's side, it held that the version presented by the Complainant stood unchallenged. It held that the failure of the bank to address the Complainant's legitimate concerns and to rectify the deviation from the agreed terms of the loan constituted a clear case of deficient service and unfair trade practice on the part of the bank.

Accordingly, the District Commission directed the bank to rectify the loan account of the Complainant to adhere to the original terms as per his request.

Case Title: Prabhjot Singh vs HDFC Bank

Case Number: 8/2024

Date of Order: 09.05.2024