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Photo: Mint
Photo: Mint

ICICI Bank refund blunder leaves its borrowers in daze

RBI had asked banks to refund borrowers the compound and simple interest gap for the period of moratorium

Scores of ICICI Bank Ltd borrowers were puzzled last week when their accounts were credited with compound interest refund amounts that were just 1% of what the bank had told them.

After a Reserve Bank of India directive following the government expressing willingness to bear the compound interest burden, lenders were supposed to refund borrowers the difference between compound and simple interest for the moratorium period of March-August by 5 November.

“We have credited an amount of 9,565 to your card account on 05-Nov-20 in accordance with Govt. of India’s grant of ex-gratia payment of difference between compound and simple interest for 6 months," said an ICICI Bank email to a borrower who got 95.65 instead. Another borrower who actually received 14.25 was informed that his account was credited with 1,425. Mint has seen a copy of both messages.

A person aware of the development said the bank sent an email soon after, apologizing for the error and also a text message conveying the same.

The bank has completed crediting all borrower accounts by the deadline of 5 November, and some of the borrowers among the large pool got these emails which inadvertently said they have received 100 times more than what they did, said the person cited above.

Meanwhile, customers who paid credit card bills on time (within the interest-free period) and did not pay any interest on their cards also received payments under the ex-gratia scheme from ICICI Bank, two credit card customers told Mint. These payments, they said, are based on the outstanding amount as on 29 February even if it was repaid by the due date. An email sent to ICICI Bank remained unanswered till press time.

The ex-gratia benefit has been extended for loans across eight categories: micro, small and medium enterprises, education, housing, consumer durables, credit card dues, automobile, personal and professional and consumption. The outstanding amount cannot exceed 2 crore, and should not have been a non-performing asset as on 29 February 2020, according to the government’s guidelines.

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