Need to raise consumer complaint against a private bank for coercion for paying insurance otherwise home loan won’t be disbursed

[Luckysajal5431]

L

Luckysajal5431
PARTICIPANT
April 23, 2025 at 9:21 am

Hi everyone,

I know by law it is not mandatory to opt for insurance for home loan. However multiple people are calling me and forcing for signing up for insurance stating that my home loan won’t be processed without insurance.

Each time when I respond that give it to me in written otherwise I won’t pay, either they cut the call or say yes and never revert.

Can somebody please guide me here??

Share

[Sapanmaster587]

S

Sapanmaster587
PARTICIPANT
April 23, 2025 at 9:38 am

You’re correct that banks cannot legally make insurance mandatory for home loan approval under the RBI guidelines. The bank’s behavior constitutes unfair practice under the Consumer Protection Act, 2019.

Start with a written complaint to the bank’s branch manager, regional/zonal head and grievance officer.

If the bank doesn’t resolve within 30 days, file a complaint with in RBI Ombudsman. You can file a complaint with the District Consumer Court.

Share

[Luckysajal5431]

L

Luckysajal5431
OP
April 23, 2025 at 9:44 am

But then my home loan will be delayed and the seller would demand money, which is correct. How to navigate this?? That I am forced to pay this

Share

[Sapanmaster587]

S

Sapanmaster587
PARTICIPANT
April 23, 2025 at 11:07 am

Refusing the insurance may delay your loan, but paying under coercion isn’t right either.

In the complaint write “While I’m willing to consider insurance voluntarily, I object to it being made mandatory for loan processing as this violates RBI guidelines. I request immediate processing of my loan application without this precondition”.

Also you can take the insurance and cancel it immediately after the loan is disbursed. I guess you can do it within 30 days and it’s refundable.

Share

[Nileshfox961]

N

Nileshfox961
PARTICIPANT
April 23, 2025 at 9:43 am

Give a written complaint to the manager and above them and also tell them you would go to consumer court regarding this. If bank doesn’t resolve write to ombudsman

Share

[Desiknight9081]

D

Desiknight9081
PARTICIPANT
April 23, 2025 at 9:57 am

Hi. I’m a Delhi based lawyer. You should write to the bank, apprising them with the fact that you’re well aware of the law as well as your rights, and any contravention thereof will attract legal consequences for them. Get a lawyer in the picture if need be, to put it across sternly.

Share

[Luckysajal5431]

L

Luckysajal5431
OP
April 24, 2025 at 2:20 pm

Bank has now delayed my application. They are calling me and asking to take insurance. When I am asking to give that in writing in an email, they are confirming that unless u pay for insurance your application will not get processed. What kind of harassment is this???

Share

[Author]

Posts