Madurai MP writes to Union finance minister on ‘illogical procedures’ followed by financial firms

MADURAI: Madurai MP Su Venkatesan has written to Union finance minister Nirmala Sitharaman on financial firms that make existing customers pay a huge sum to convert their interest to lower rates.
This is due to “illogical procedures” being adopted by the housing loan companies in charging new rates for existing customers consequent to a decision on the same by the RBI, he said.
All housing finance companies are automatically charging higher rates of interest for existing loans when a rate hike is done consequent to RBIs decision. Nevertheless, when the RBI lowers the interest rates, the customers have to submit in detail applications to convert to lower rates. In failing to do so, they lose a lot of money.
Moreover, these finance companies are charging a huge sum as service charges along with GST @ 18% for exercising options for reduced rates. He added that this is a procedure that penalizes customers for exercising an option consciously to avail of its benefit.
He urged the Union minister to intervene immediately, safeguard the interests of the consumers and issue instructions to all housing loan companies.