Reader Story: EMI Horrors and Why You Should Avoid One When You Can

by Vinaya HS on May 25, 2011

in Finance

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A reader shares his EMI woes with Bajaj Consumer Finance and Citibank.

Two months back, when I purchased something, I opted to fund the purchase through a loan from Bajaj Consumer Finance. I asked for the ECS debits for the EMI to be done from my Citibank account. Previously, I had done the same for my LCD TV with the ECS debits for the EMI being done from my ICICI Bank account and I had no problem whatsoever.

This time however, in the very first month, I observed in my [Citi]bank statement that the ECS had been “Stopped by Drawer” and therefore the EMI was not paid. I immediately wrote to the Customer Care of both Bajaj Consumer Finance and Citibank. They take about four to five days to respond. Both Bajaj Consumer Finance and Citibank responded saying that the other party has some problem, but no one was clear on what the problem actually was. After a lot of queries, Citibank replied saying that “Multiple vendors can register for ECS under the same Utility Code.”

Now, Bajaj Consumer Finance had registered the ECS under the Utility Code XXX. Unfortunately, XXX also happened to be the same Utility Code that was used by another vendor and for which I had issued an ECS stop payment in 2007. Since the Utility Code was the same, the stop payment automatically applied to the ECS Debit for Bajaj Consumer Finance as well.

I replied back asking how on Earth would I know about who has which Utility Code and who assigns/chooses this Utility Code. Bajaj Consumer Finance levied Rs 350 as a late fee. I asked Citibank to bear this late fee but no one cares to answer. Now, as you say, WTF was the word in my mouth.

This incident created a lot of frustration and mental agony. Now, the second EMI was due on May 05th. I went ahead and closed the whole loan amount including the late fee on May 04th and immediately sent emails to the grievance team of Bajaj Consumer Finance along with the receipts. To my utter horror, the cycle repeated with the second EMI as well. Bajaj Consumer Finance is asking me to pay the EMI even though I have closed the loan. They say they will refund the excess payments later. I have told them I am ready to pay the EMI but only if they guarantee a refund and without deducting a late fee. There is no reply yet.

I’ve also written to the Head of Citibank Customer Care. I feel so helpless and frustrated. I have decided to never ever to take a loan in future. I’m also thinking of closing my 10-year relation with Citibank and filing a complaint with the Ombudsman.

A couple of days later, the reader had an update to share.

The Head of Citibank Customer Care replied 8-days after I’d escalated the issue and they’ve asked me to wait for a few more days till they investigate the issue. In the meanwhile, a Customer Care Executive also called and after I gave them a piece of my mind regarding their customer service, agreed to refund the Rs 350 within a couple of days.

Let’s see if I get the refund.

All I can says is “Ouch!” It definitely isn’t worth your time, money, and energy to get into such a mess. A few guidelines that I can think of:

  • Never ever buy a luxury or a lifestyle item on credit. Instead, plan for it, save for it, and buy it. You’ll really appreciate its value that much more. You’ll also enjoy it that much more.

  • When you can avoid credit (and hence an EMI), avoid it. There’s no point in buying something on credit when you already have the funds to pay for it. Don’t play the zero-percent interest game. There’s always a catch and you’ll always lose.

Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 3 comments… read them below or add one }

Atul May 25, 2011 at 3:40 PM

Sharing my experience as well. When I decided to go for Citibank ECS for HDFC home loan I was warned by HDFC that Citibank has issues with ECS and you (customer) needs to follow up. HDFC was fine with other banks but not Citibank.

Since Citibank is my salary account I had no option and I took the risk. Did regular follow up and finally got done.

I guess Citibank has bad reputation when it comes to ECS.



Vinaya HS May 25, 2011 at 3:58 PM


Almost 6-years back, I’d written about Why I Hate Citibank?

My conclusion was: “Now I know why ‘The City Never Sleeps.’ It’s because they are too busy having nightmares.”

I guess things haven’t changed a bit.

utkarsh September 20, 2011 at 11:10 AM

I am also sharing my experience.

I have purchased the AC through Bajaj Finance and given my Citibank account number for ECS. I have given the canceled cheque to Bajaj finance to register ECS with Citibank.

Now on the due date, ECS has been requested by the Citibank and same was denied by Citibank saying ECS is not registered.

So I have called and follow up with Bajaj finance and Citibank about the same but no response. I have paid late fee.
The followup last long upto the 1 month and new due date came and again the same issue.
Then I again followup with Bajaj Finance and Citibank. They told me after 2 months that my signature was matched. What the hell !!. I have not signed on the canceled cheque. Bajaj finance representative told me not to sign on the cheque. Its not required.
So conclusion is, There is also a problem in ECS if you go for your Citibank account.
I have never faced any issue during any purchase through Bajaj Finance and ECS from my ICICI bank account.

Citibank has worst service. They also have very limited branches in mumbai. I have to travel almost 30 km to reach their branch office.

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