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Personal Finance

ECS Fiasco: Kotak to Blame, ICICI Redeems Itself

Ravikiran Rao writes in response to the ECS post:

Just wanted to give [the story] a little more detail. The detail will indict Kotak further and probably exonerate ICICI – go ahead and update your post with this if needed.

So my ULIP with Kotak turned 3 in November 2009. I had already decided to stop paying my premium after that and keep the ULIP in autocover mode. In November, I call up their helpline and ask them how I am supposed to do that. They give me conflicting answers. Their initial tack was to say that payment cannot be stopped. But when I press them, they admit that yes, the policy *can* be moved into auto cover mode. When I ask again how to do that, they tell me that I have to give them a letter  – then they change tack to tell me that a mail to their client service email is sufficient. So I send them a mail. I get no reply except an automated acknowledgment. Then I find out that they’ve gone ahead and debited my ECS in December. I call them once again, and once again they hem and haw, and then say that I should give them a letter. I courier a letter, and they don’t acknowledge, and I learn that they’ve debited my ECS yet again. In the meantime, I get too involved in my professional and personal stuff to follow up, and I don’t do anything till February. I call them again in February and this time they tell me that it is better to actually go there and give them a letter.

I type out a letter, print it out and sign it, and go over to their office and hand deliver it. The female who took my letter tells me that she will forward it to the concerned third party who processes the ECS, but because it was a third party, sometimes there’s a communication gap and yada yada.. and it is better to go and get my ECS canceled at the bank. I don’t remember why I hadn’t tried this till then – I think I was under the impression that the bank is not allowed to unilaterally cancel the ECS. But anyway, this time I went to ICICI Bank Madhapur, and there the chap tells me that they aren’t allowed to do it without an NOC from the recipient. I took that at face value, but then again wasn’t able to follow up with Kotak – remember that by now, following up actually means driving 20 km to their office, something I wasn’t keen to do. Perhaps I just hoped that they’d manage to get their shit together and close the ECS.  Unfortunately, I had not taken an acknowledgment from them when I delivered the letter.

Then again in March, I get an SMS telling me that they’ve debited the ECS. This time, I realize that I better do something about it. On 25 March, I drove to Kotak, two copies of a stinker letter in hand.  The letter expressed shock that they had ignored my clear instructions about not taking my money, and if they failed to act on it, I was going to complain to the IRDA ombudsman. This time, I decided that I was going to get a stamp and signature from them acknowledging my letter, so that I could use it as the basis of my complaint to IRDA. I walked into a scene reminiscent of a sarkari daftar. There was no power at their office, and the entire gang was having an extended lunch break. I go, have a coffee, return and find that the lunch break is still on, and there is still  no power. I give my letter to the security guard who takes it inside. I see from the glass door that the woman who takes it reads it, then tells the guard (with no sense of urgency or concern) “Ya.. just go  get a stamp and give the acknowledgment back to him”. Then in a Kafkaesque twist, the security guard searched for 10 minutes for a stamp, but couldn’t find it.

In that time one guy deigned to finish his lunch and decided to man the reception counter. He takes a look at my letter, and tells me that as a “policy” they don’t cancel the ECS. I asked him to show the policy. He said that he couldn’t show it, but that was the policy. I told him that I needed an answer in writing. He told me to get the ECS cancelled through the bank. I told him that ICICI wanted an NOC from Kotak for that, and asked for an NOC. He said that they couldn’t give an NOC. I told him that I wanted a reply from Kotak to my letter in writing. If they refused in writing, I would take that letter and go to the IRDA. If they didn’t reply, I would still go to the IRDA. He finally deigned to give me an acknowledged copy, and told me that I could expect a reply in two working days. I took his number and told him that if I didn’t, I would call back.

It was then that I had that tweet exchange with you and learnt about the RBI circular. I decided to go to ICICI on Saturday (27th) with a copy of the circular and force them to stop the ECS. But on 26th, I get a call from the Kotak guy. It seems that he’d forwarded my letter, and was told that I was supposed to fill in a form for continuation of the policy in Auto-cover mode. He mailed me the form when I asked. The existence of this form had been completely hidden from me for 4 months by everyone at Kotak, but the threat of a complaint to the IRDA ombudsman brought it out within one day. I have yet to fill in the form and send it to them.. Will keep you posted on that.

But in the meantime, I went to a different branch of ICICI closer home yesterday. I had a printout of the RBI circular handy to show it to them if needed. But turned out that it wasn’t needed. I just told them that I needed to close the ECS, and they asked me to write out a letter. I did, and while he asked me to specify why I wanted to close the ECS (presumably because there was some mandatory text field he had to fill out) he didn’t hassle me about it. Just a “I don’t want to pay them money any more” worked. There was no mention of an NOC.

So, that’s my story so far. I think that the ICICI problem was just a case of one guy at one branch being ignorant or lazy or both, so I wouldn’t be too hard on them. Kotak, on the other hand, is just evil. They clearly have a policy of trying every trick they can to stop people from withdrawing ECS mandates. Obviously, a lot of people won’t have the time, energy or knowledge to pursue them – and how many people will know that “Do it or I will complain to the IRDA Ombudsman” are the magic words?


Look at the trouble he had to go to.

  • Call Kotak, who ask for a mail.
  • Send mail, get canned ack.
  • Kotak still uses ECS to take money.
  • Call Kotak again, they ask for signed letter.
  • Send signed letter by courier. No acknowledgement.
  • Kotak still uses ECS to take money.
  • Call Kotak YET again, they ask him to come to their office.
  • He goes and gives a letter in person.
  • He also asks ICICI to cancel but the banker asks for an NOC, which Ravi later realises is not required.
  • Kotak still uses ECS to take money.
  • Miffed, Ravi goes to Kotak’s office AGAIN, is lied to blatantly (“Policy of not cancelling ECS”, “Can’t give NOC”, etc.) but forces the letter through with the threat of an IRDA complaint.
  • Kotak calls and asks Ravi to fill out yet another form to move the policy to auto-cover mode, which should have been told to him on his FIRST phone call. It might be the “ACM” form on the Kotak website; but why the shoddy phone and in-person service?
  • Another branch of ICICI lets Ravi cancel the ECS with a letter/form and no NOC.

4 phone calls, 4 letters, 2 visits to Kotak, 2 visits to ICICI Banks branch, 1 more form to be couriered. For one little tiny process. (Buy all telecom/courier/oil stocks)

What happens now? Will Ravi’s ECS cancellation work? Will Kotak STILL try to use ECS next month? Will ICICI refuse that ECS? Will Kotak then try to “recover” premium from his ULIP account? Will ICICI charge “ECS return” charges, because some other system botched up?

The score till now: Ravikiran +1, ICICI Bank 0, Kotak Life –100.

I hope the story ends here.

  • Ravikiran Rao says:

    >Hey thanks for posting this. Couple of additional points:
    1) Yes, that is the "Consent form" they sent. The interesting thing about this (apart from the fact that they never told me about it) is that this is the form that instructs them about what to do if I stop paying my premium. This is not an instruction to them to stop debiting my premium. So, it is entirely possible that they still don't have a procedure to stop my ECS. Hopefully, ICICI has honoured my cancellation and I won't have to find out.

    2) Second, my policy document is actually quite clear on what they are supposed to do if I stop paying my premium after the 3rd year. They are supposed to wait for a grace period of 15 days and then have the policy enter the auto cover mode. But according to this consent form, the IRDA circular lets them offer me 2 choices – auto-cover mode or surrender the policy, which seems like a good thing till you realize that the default option is to *surrender the policy*. In other words, if I had stopped the ECS without bothering to inform Kotak as I thought I was within my rights to do, they could have used the IRDA circular to violate the plain language of the contract and paid out the surrender value of the policy.

  • idom says:

    >I am not surprised at all. I am kind of sadistically happy that I am not the only one who fights with the banks. Almost all the time(if not each and every time)I come to conclusion that bank people are simply idiots.

    Lesson learnt.
    A. Never ever opt for ECS with any bank, even if it is your phone bill. Much more advantageous to spend two minitues every month rather than spend 4 days once in two years.

    B. If you have some work in the bank never ever go without following things with you. It is an ever evolving list
    1. Bank passbook/bank statement of last 2-3 Fin years
    2. 10 copies of passport size photos
    3. Printout of Application , you need at least 2 copies.
    4. Never forget to take ackknowledgement, Make sure that date is written/stamped on it by your bank along with the branch name. If you can get bank employees name/employee id on it, it would be great
    5. Address proof , like passport / ration card
    6 . PAN Card,
    7. If it is a joint account make sure that all the account holder enter the bank along with you, And if it is not possible, make sure you have 5 copies of blank papers with all tha account holder's signatures.
    8. Be prepared to spend 3 -4 hours .Never /ever tell you boss I will be bank in half an hour.
    9. Stapler/scissors/pencil/ pen ( both black and blue) / Upins and any other stationary you deem fit.
    Don't expect banks to have any ofthem.
    9. Never ever enter a brach without a nice novel
    10. Don't go to bank if you have soar throat, you will not be able to shout effectively.

    Updates to the list are most welcome.


  • aditya M says:

    >Am equally disturbed with Ravi's plight and the entire run off show.

    Am surprised for well informed people like Ravi and people like our dear blogger willing to offer a helping hand when needed, such is the chaos and effort we need to withstand, we can only understand the plight of common massess..

    My belief got stronger-No ULIPS.

    My wishes for the blogger for such a coverage and informed outlook

    On the lighter note- Does the INdia TV people have an appreciation of the entire hullabaloo and can they address it to get a re-dressal? 🙂

  • Anonymous says:

    >Why not empty your bank account.. let the damn ECS payment in the meantime get things sorted out and then continue with your account as usual.
    Just a thought!!

  • William Johns says:

    >Wow! I love your new design! it's really awesome

  • Deepak Shenoy says:

    >Anon: To "why not empty your bank account" – main issue is ICICI charges you Rs. 250 per ECS debit return.

  • Anonymous says:

    >I enjoy the way you dramatize your posts. Dont need the Kyunkis of the world no more 😉 (Sell all Media, eh?)

  • Sujit says:

    >Hi Deepak,

    Just a query, a bit off the topic, but related to Kotak. I have term Insurance from Mahindra Kotak. This FY I have paid my 4th Premium. All they have sent me is a receipt for the premium paid, that too in an email. Shouldnt there be some kind of official acknowledgement on paper?
    I am not sure. In the case of eventuality, what should be the paper that would substantiate that I have paid the latest premium to keep the policy in force?
    Would be great if you can throw some light on this if possible.

    Thanks and Best Regards

  • Deepak Shenoy says:

    >Sujit: No need for a paper trail. You would usually have paid by cheque or an online transfer, a record of that is sufficient.

    You can print out the premium paid receipt too.

    Your problem is: What if Kotak refuses to accept email? You have the transfer record – either cheque number or online transfer date – which is enough to satisfy an IRDA ombudsman or a court. If it has to go that far.

  • Sujit says:


    Thanks for the explanation.


  • Anonymous says:

    >1. Always remember: no one ever became rich without being evil. All those morons appearing on CNBC spouting saintly stuff are REAL EVILS. I don't know about existence of God but I see the existence and proliferation of the opposite on CNBC every day.
    2. Idom is right. Take a print out of your horoscope as well. Preferably attested by a "gazetted" officer. Attestation by a (notorious) notary just won't do. I hope Kishenji burns down the damn office where they print out the gazettes.
    3. That's what happens when half-clever but overpaid liers (or is it lawyers) become finance minister before moving to home ministry.

  • Bala says:

    >the ignorance by the kotak and ICICI is mainly because of lack of proper law.
    they know nothing would happen.
    RBI has specified rules to be followed by banks.
    has RBI said anything about penalty for not following such rules?

    I don't believe in fixing the problem: bank make mistake, we notify them, they rectify.
    they would always wait for us to notify.

    let them rectify, but also pay significant penalty to the affected

    the court would simply direct the bank to refund the amout.
    rarely you may also get lawyer and compensation fee of 500Rs

  • Indian Thoughts says:

    >I am facing similar issue. I signed ECS for IDFC mutual fund which should get debit from ABN Account. IDFC is not sending ECS mandate form to ABN Amro and still trying to get the money from my account. ABN conveniently denies it and charges me Rs.221 for bounced ECS.

    I tried calling IDFC MF, they don't care. ABN says they can't do anything about it. I am now fillig ECS mandate form again and submitting it to ABN. Let's see if this helps.

  • Anonymous says:

    dear all,
    this usually happens, recently my friends told me about retention of our valueble customers, by postponing their paid up/auto cover after 3 policy years.
    i donot know the method of his purchase of ulip,
    is it from bank personals or life agent?
    if it is a smart advantage ulip he looses his money of first year premiums.
    any how my TEA freinds in banks helps me !
    thanks for this service.

  • Anonymous says:

    >I believe kotak life insurance is not a trust worthy company . It clearly shows as they are firing there staff and closing there branches. LIC is the best in past and future.

    These private players are only working for profits not people benefit.
    Kotak i rate not a good employer. I suggest my friends and other not to invest in this group as they are about to sell threre market stake and closing business.