SBI home loan Fraud by branch

[dravidsarang]

I recently got a SBI home loan (SBI processes home loans using a separate branch that they call racpc)
One person at the branch told me that SBI would charge me ~1800Rs for life insurance to cover my home loan, and I told him that I was fine with it, he then made me sign at around 100+ places (mostly related to builder buyer agreements etc).

Almost 2 months after this, another loan of 1.5lakhs is opened and linked to my savings account, this loan is for life insurance.
The loan is opened and I am charged without intimation/consent.

The SBI branch is not ready to cancel this insurance and asking me to pay 1.5 laksh, is there anything that I can do?

1.5 lakhs is a huge amount for insurance of home loan.

Few points I would like to cover:
NO, buying insurance is not mandatory while taking home loan. However, it is next to impossible to get HL from SBI without taking HL insurance.
There is also a trick using which one can minimize the insurance amount > take the cheapest variant of rinn riksha insurance from SBI Life Insurance and present it in your HL application, they will agree (tried and tested) and take your HL application forward with it.

Now, coming to the point (issue):
You like most of us have signed all papers without doing the proof reading. THIS is a serious big problem with HL applicants. I always recommend to take the application home, read it thoroughly and complete signatures next appointment day (this is your right and no one can stop you with this).

Since, you have signed the papers, there is no forceful way to get your money back.
However, if this is under 15-30 days, SBI life insurance could be returned (look below):



This in fact is an option for every/any life insurance policy in India.

However, if you crossed this timeline then I am afraid there is no possible way to get your money back.

 

[Pravnz]

SBI offers two different insurances with their home loan:
1. Home insurance (mandatory)
2. Home Loan insurance (voluntary)

Refer to the articles below: the 2nd articles mentions it as "insurance"

Difference Between Home Insurance and Home Loan Insurance

How Home Insurance and Home Loan Insurance different from each other? From understanding the differences to finding the best coverage, this guide has got you covered.

www.sbirealty.in

https://homeloans.sbi/downloads/Terms-and-Conditions.pdf

 

[Zacobite]

1.5 lakhs is a huge amount for insurance of home loan.

Few points I would like to cover:
NO, buying insurance is not mandatory while taking home loan. However, it is next to impossible to get HL from SBI without taking HL insurance.
There is also a trick using which one can minimize the insurance amount > take the cheapest variant of rinn riksha insurance from SBI Life Insurance and present it in your HL application, they will agree (tried and tested) and take your HL application forward with it.

Now, coming to the point (issue):
You like most of us have signed all papers without doing the proof reading. THIS is a serious big problem with HL applicants. I always recommend to take the application home, read it thoroughly and complete signatures next appointment day (this is your right and no one can stop you with this).

Since, you have signed the papers, there is no forceful way to get your money back.
However, if this is under 15-30 days, SBI life insurance could be returned (look below):

View attachment 64470

This in fact is an option for every/any life insurance policy in India.

However, if you crossed this timeline then I am afraid there is no possible way to get your money back.

that is exactly the problem.. we are all guessing.. OP needs to get hold of the docs, go through what he has signed up for and then see what needs to be done..

 

[RAMESH BABU N]

See my post # 13.
And, follow that, without further delay.

 

[neo.puneet]

I was told it is mandatory to take insurance and they gave 55k insurance and split it in 30 years EMI and later on changed the interest rate and screwed up my cibil. NEVER trust SBI

 

[adldeeps]

I recently got a SBI home loan (SBI processes home loans using a separate branch that they call racpc)
One person at the branch told me that SBI would charge me ~1800Rs for life insurance to cover my home loan, and I told him that I was fine with it, he then made me sign at around 100+ places (mostly related to builder buyer agreements etc).

Almost 2 months after this, another loan of 1.5lakhs is opened and linked to my savings account, this loan is for life insurance.
The loan is opened and I am charged without intimation/consent.

The SBI branch is not ready to cancel this insurance and asking me to pay 1.5 laksh, is there anything that I can do?

Although this is not legally compulsoary but they trap us during final days of loan clearance when builder is dancing on our head and we think its just ~1800Rs I will throw it . I faced similar delima where they forced me for insurance while getting loan. Usually in this they force sell some insurance which has payment duration similar to loan duration. Also sometimes they will make agree for lumpsum premium say 1.5Lakh and add that to loan principal and effectively your monthly EMI will increase by ~1800Rs for which you ended up agreeing mistakenly.

But then I did lot of talking around and I figured they have 2 purpose for this. 1) Securing the loan where if you leave this earth soon then your spouse will pay up loan from this insurance (most likely they would have already made spouse as coapplicant). 2.) Achieving branch targets to sell insurance/investment plans.

So I played smart I negotiated that
I will buy a separate Term Plan untill my 60 year of age (with little lesser or more Sum insured than they asked according to my longterm needs of Term Plan)
And it worked. I gave a cheque for 1st premium and got loan sanctioned. I am paying annully 6K annually for a Term insurance of 25L and have a freedom to continuing till I am 60 or leaving anytime.

 

[RajS]

Although this is not legally compulsoary but they trap us during final days of loan clearance when builder is dancing on our head and we think its just ~1800Rs I will throw it . I faced similar delima where they forced me for insurance while getting loan. Usually in this they force sell some insurance which has payment duration similar to loan duration. Also sometimes they will make agree for lumpsum premium say 1.5Lakh and add that to loan principal and effectively your monthly EMI will increase by ~1800Rs for which you ended up agreeing mistakenly.

But then I did lot of talking around and I figured they have 2 purpose for this. 1) Securing the loan where if you leave this earth soon then your spouse will pay up loan from this insurance (most likely they would have already made spouse as coapplicant). 2.) Achieving branch targets to sell insurance/investment plans.

So I played smart I negotiated that
I will buy a separate Term Plan untill my 60 year of age (with little lesser or more Sum insured than they asked according to my longterm needs of Term Plan)
And it worked. I gave a cheque for 1st premium and got loan sanctioned. I am paying annully 6K annually for a Term insurance of 25L and have a freedom to continuing till I am 60 or leaving anytime.

The insurance is optional. They dont force.

 

[MrJJ]

A simple explainer:

 

[shashankrt]

You may be right But, He was aware of what he was doing. He has agreed and signed the docs

Yes however I don't think he was told that it will be lumpsum of 1.5 lakhs. From what I understand he was told 1800 per month.

 

[RajS]

Yes however I don't think he was told that it will be lumpsum of 1.5 lakhs. From what I understand he was told 1800 per month.

In my caee, SBI told me everything about new loan account for insurance and EMI details

 

[shivek]

Within free lookup period insurance can be cancelled without any cost (except some minimal fees like processing fee, stamp duty, etc)
Post free lookup period policy surrender is the option but won’t be beneficial as surrender value reduces to almost half of the premium in the 1st month itself.
Here is surrender value table for my insurance from ICICI. Single Premium:1.3L Tenure: 15yrs


Later I got my HL transferred to SBI. During processing I was told that post flat registration insurance team will be calling me to opt for insurance which is not mandatory.

Note: Though I had transferred my HL from ICICI I had kept my insurance active.

 

[RajS]

Within free lookup period insurance can be cancelled without any cost (except some minimal fees like processing fee, stamp duty, etc)
Post free lookup period policy surrender is the option but won’t be beneficial as surrender value reduces to almost half of the premium in the 1st month itself.
Here is surrender value table for my insurance from ICICI. Single Premium:1.3L Tenure: 15yrs
View attachment 64603

Later I got my HL transferred to SBI. During processing I was told that post flat registration insurance team will be calling me to opt for insurance which is not mandatory.

Note: Though I had transferred my HL from ICICI I had kept my insurance active.

How the home loan insurance is still active when you had closed the home loan?

In SBI, the home loan insurance get closed automatically when the home loan completes. The excess premium paid will be refunded

 

[shivek]

How the home loan insurance is still active when you had closed the home loan?

In SBI, the home loan insurance get closed automatically when the home loan completes. The excess premium paid will be refunded

Not sure about others but with ICICI it is not mandatory to close your insurance.
While closing HL they were telling that I need to close the insurance also but I showed them the clause where it was written that insurance can be continued even if the HL is getting foreclosed.
After that they accepted for HL closure and loan was closed.

 

[anujdit]

I have SBI Home Loan (Maxgain OD account) from last 15 yrs and they always ask me to get insurance. However I take the Home insurance and term insurance from outside, and share the policy details with RACPC branch of SBI.
SBI every year issue me a policy and then i share my policies details, then they cancel the same. It happened for initial 3-4 yrs then they stopped.

For SBI forceable insurance, you can talk with SBI senior team. Contact of SBI senior member can be found through SBI Quick app.

 

[desiviru]

Don't take it personally but it is a everday story. People just signing things off. 🙄 Gullible nature and then rant against banks. Agreeing for insurance and then thinking you pay for it in EMI questions your own awareness. Most people in India are infected with some kind of mental issue where asking help before going for something make them think, they will be perceived as fool if they ask for help. Asking questions is your duty before going for anything. Expecting bankers to tell you every detail is a deficiency on your part.

 

[Zacobite]

Don't take it personally but it is a everday story. People just signing things off. 🙄 Gullible nature and then rant against banks. Agreeing for insurance and then thinking you pay for it in EMI questions your own awareness. Most people in India are infected with some kind of mental issue where asking help before going for something make them think, they will be perceived as fool if they ask for help. Asking questions is your duty before going for anything. Expecting bankers to tell you every detail is a deficiency on your part.

🔥🔥🔥🔥.. 🔥🔥 on fire

 

[yobro]

I recently got a SBI home loan (SBI processes home loans using a separate branch that they call racpc)
One person at the branch told me that SBI would charge me ~1800Rs for life insurance to cover my home loan, and I told him that I was fine with it, he then made me sign at around 100+ places (mostly related to builder buyer agreements etc).

Almost 2 months after this, another loan of 1.5lakhs is opened and linked to my savings account, this loan is for life insurance.
The loan is opened and I am charged without intimation/consent.

The SBI branch is not ready to cancel this insurance and asking me to pay 1.5 laksh, is there anything that I can do?

Insurance angels can help.

Search them on YOUTUBE.

 

[scn]

This is cheap tactics played by current banking system. You can say no after you get the amount sanctioned for home loan if you already have term insurance. Or better go with monthly premium where you can stop anytime. You can simply cancel this in free look period which is generally 30 days after you recieved your policy document.
But the point is still not holds here. As this is personal loan opened of single premium of 10%-15% interest, Even you cancel your premium. You need to close loan also which comes with pre pay charges. Even you don't want to cancel term insurance First close this personal loan which incurs high interest rate when you have money before pre paying any amount to home loan .
So overall, they want to earn by all the way
1. earn on home loan
2. Earn on term insurance
3. Earn on personal loan which is taken for term insurance single payment
4. Earn to pay amount to reduce interest charges when RBI reduces interest rates.

 

[RAMESH BABU N]

My take on this issue.

In most of the HL cases, what I found was these prospective customers DO NOT study the HL market at all - BEFORE they are ready to sign the dox.

They are in a tearing hurry n DESPARATE to close the deal.

NEVER read, NEVER understand, NEVER ask any questions - about the dox, clauses or the various terms n conditions. They PRESUME n PRETEND. They somehow want the loan. As if the seller, the builder, the bank/branch or even thr property might vanish tomorrow and they miss a golden chance.

This sort of hurried approach to a HL - the biggest loan they are taking personally - is bound to attract all sorts of mis-sellings, wrong-doings and deceptions. Seen many cases where unrelated, unconnected n superfluous dox are also got executed. Most of the time with ALL fields unfilled or filled in pencil.

Not that I am saying what they (bank or customers) are doing in a hurry is right or wrong - but EVERYONE is in a TEARING HURRY.

So-called bankers (most of them are agents - commission agents - or even brokers) also DO NOT KNOW many things - reason - they too - DO NOT READ, NOT CAPABLE OF UNDERSTANDING as they have no time - but only targets.

Luckily - for me/us - we took 3 HLs - all as staff members. Being IT guys, we NEVER worked in General Banking or Advances area (except for 2 year mandatory assignment in a rural branch in a rural place). And, luckily at that times - there were no private banks, no agents, no brokers n no outsiders handling our case/dox.

 

[desiviru]

My take on this issue.

In most of the HL cases, what I found was these prospective customers DO NOT study the HL market at all - BEFORE they are ready to sign the dox.

They are in a tearing hurry n DESPARATE to close the deal.

NEVER read, NEVER understand, NEVER ask any questions - about the dox, clauses or the various terms n conditions. They PRESUME n PRETEND. They somehow want the loan. As if the seller, the builder, the bank/branch or even thr property might vanish tomorrow and they miss a golden chance.

This sort of hurried approach to a HL - the biggest loan they are taking personally - is bound to attract all sorts of mis-sellings, wrong-doings and deceptions. Seen many cases where unrelated, unconnected n superfluous dox are also got executed. Most of the time with ALL fields unfilled or filled in pencil.

Not that I am saying what they (bank or customers) are doing in a hurry is right or wrong - but EVERYONE is in a TEARING HURRY.

So-called bankers (most of them are agents - commission agents - or even brokers) also DO NOT KNOW many things - reason - they too - DO NOT READ, NOT CAPABLE OF UNDERSTANDING as they have no time - but only targets.

Luckily - for me/us - we took 3 HLs - all as staff members. Being IT guys, we NEVER worked in General Banking or Advances area (except for 2 year mandatory assignment in a rural branch in a rural place). And, luckily at that times - there were no private banks, no agents, no brokers n no outsiders handling our case/dox.

99.99%+0.01% = 100% Agree.

That's what I have been saying, people don't make themselves aware and no habit or reading. They find it easy to just sign off and get money they don't own. Agents are there to book loan or sell product and not to make people aware. If banks had to make every customer aware themselves, they will spent 90% of their time telling people. For that RBI has directive to banks to print enough TnC material so that people read. These days everything is available on website but in our days we used to read a common TnC booklet available at bank by taking it outside/home and then return as they used to request to return after reading due to stationary constraints.

Same with CC. While I spend only within 25-50% limit of what I own in savings acc, most of young these days spend money that they don't have and are clueless on how to arrange money for payments and then knocks parents/friends/relatives door asking for money for sometime. Get themselves into debt trap and never come out of it. Recently my friend's jobless younger brother got a CC by faking employment and used it to purchase Samsung S23 just yesterday and when I asked him who will pay for that now? No answer and said, dekh lenge bhai and I was shocked with the response. Here, I used to arrange funds many days before I needed to buy anything. Some people are born to be doomed.