Wednesday, April 27, 2011

HDFC charges Rs. 100 per transaction (online)

When I took my home loan in July 2008, HDFC was insisting that i sign up for ECS. Eventually i did, but only to cancel it at the end of the 1st month. 

The reasons i cancelled it:
1. They just had only 2 dates for ECS i.e. 10th and 25th of every month. I was asked to choose between these two. I had argued that i should have the right to decide the ECS date but they did not oblige. So i had cancelled it after one month. 
2. HDFC usually allows you to pay your EMI outstanding by the end of a month (say april 2011) upto the 5th of next month (i.e. 5th May 2011). So i thought why should i make the payment on 10th or 25th if i have the option to pay it by 5th of next month?
3. There was (there still is) an option to pay your EMI online. I thought it was the easiest option compared to PDCs or ECS. 

So i quickly switched to the online payment method and was quite confortable in it. 
I would usually pay my EMI anytime between 1st and 5th of the subsequent month and it went smoothly. 
But there was a glitch. Whenever i paid on either 4th or 5th, HDFC would send me a notice on 4th (which i would receive it by 8th or 9th) that my EMI was overdue and so and so interest was charged extra. 
Though (and obviously) these notices didn't have any impact on my account as i would have had already paid the EMI before 5th so the notices were not to be taken seriously. Still i contacted HDFC several times to stop the useless notices. Each time i protested, they suggested i use an alternative payment method like ECS, PDCs etc. They really pressed for ECS, but continued insisting the online payment method. 

Suddenly in October 2010, HDFC put a notice on their online portal that all online payment would incur a charge of Rs. 100 per transaction. It was really shocking. 
Payment of EMI using netbanking is just like an NEFT transaction and it should not involve any extra charges than what banks charge (Correct me if this is not the case). I have seen most of the banks charging a maximum of Rs. 5 (Rs. five) per NEFT transaction for a transaction below Rs. 1 Lakh. 

But this was HDFC's way of discouraging people from using online facilities. 
I contacted them and explained to them that they should not charge so much for just paying an EMI. Afterall it was not a credit card or a debit card. Rs. 100 is very high in any case for debiting the EMI amout from your bank. 

Their reply was more shocking. 
"Web payments are not used by customers to make monthly EMI payments and are used only selectively by those customers who are outside India.  This paymode is not offered in the offer letter. As mentioned in my earlier reply, you can submit post dated cheques."
I was literally spellbound after seeing this reply. I told them that the whole world was moving online, and you were being regressive by penalizing those customer who are trying to go online. 
As i didn't have any other option, i finally decided to continue the old way of paying by PDCs. 
But this time I gave PDCs dated 3rd of every [subsequent] month. 

Earlier, if i had made online payment on 3rd, HDFC would get it on 3rd or 4th. 
Now HDFC dutifully deposits the cheque on or after 3rd, (Usually 5th of every month), it then gets cleared by 6th or 7th. The cheque also exchanges many hands increasing the workload of HDFC's employees. 

Dear HDFC, please tell me, did you really benefit by discouraging the online payment?


  1. Same has happened with me... protests fall on deaf ears... I opted to drop a cheque every month... this decision of online charges by HDFC is simply idiotic. I'd suggest new customers to stay away from HDFC.

  2. I am also pissed by these idiotic move. I think we can arrange some kind of online protest by HDFC home loan consumer groups. If we there is no active group yet then we can create a group and create initiative.

  3. @shib, @Bond,
    Good news!.
    HDFC has removed the transaction fee of Rs. 100 for online payment of EMI.