Beware of taking a home loan from ICICI Bank: Consumer court levies 1 Lakh penalty

From an article in Times of India:

Excerpt:
"After completing all formalities needed to avail a loan, Goyal entered into an agreement with a home finance company and the bank. A loan of Rs 37 lakh, which was to be paid in 180 instalments in a period of 15 years, was sanctioned and he started paying the instalments from March 2005 onwards on a regular basis. However, a letter took him by surprise in August 2008. The letter allegedly stated that the repayment schedule through EMIs was being revised to increase the repayment time from 180 to 502 months. He immediately approached the bank's local branch and requested cancellation of the payment rescheduling but to no avail. "

Read the full article here:
http://timesofindia.indiatimes.com/Chandigarh/Bank-to-pay-Rs-1-lakh-for-overhauling-loan-account/articleshow/4750737.cms

This means that first ICICI bank agreed to give a loan for 15 years (180 / 12). Then using some obscure terms and conditions (who reads those anyway?), they hiked the tenure to 42 years (502 / 12).
42 years means your children (and maybe your grandchildren) will still be paying EMIs!!!

It is not humanely possible to read terms of conditions for each financial product, and clearly it is the banks fiduciary duty to adhere to the spirit of the agreement. I think any bank which shows such tendencies to violate fiduciary duty will exploit its customers.

Another issue is that of charging higher interest rates to existing home loan customers, and lower interest rates to attract new customers, but that merits a blog post of its own!

Can we share our experiences of taking home loans with different banks.?I have two home loans, one from HDFC and one from LIC housing finance, and the experience has been good so far (for the past 2 years).

Thanks to Ravi Karandeekar for blogging about the article.