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HindustanTimes Sat,19 Apr 2014

Banks cannot deviate from promised rate of interest

Pushpa Girimaji, Hindustan Times   February 05, 2012
First Published: 00:31 IST(5/2/2012) | Last Updated: 00:36 IST(5/2/2012)

When will banks learn to take responsibility for their actions or inactions? When will they realise that they cannot make their customers pay for their mistakes?

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Take this example from the records of the Banking Ombudsman. A consumer keeps Rs. 30,000 in a fixed deposit (FD) for 10 years and is promised a maturity value of Rs. 88,796. After 10 years, when the consumer goes to collect the amount, he is told that he will get only Rs. 80,000. The bank's explanation for this drastic reduction in the maturity amount is even more baffling. 

Apparently, the day the consumer deposited the amount, the bank's head office reduced the rate of interest from 11 per cent to 10 per cent, but the branch had not received the communication and therefore, it promised the consumer 11 per cent on the deposit. On discovering this 'mistake', it decided unilaterally and in contravention of the terms of the fixed deposit receipt that it would pay the consumer only 10 per cent interest and informed him of this grand intention after 10 years when he went to get the amount. Obviously, the bank had no respect for the terms of the FD receipt that it had issued to the consumer. Eventually, the consumer had to seek the help of the Banking Ombudsman to get the full amount due to him.

Here is another such case

GM Gupta: On the basis of the interest rate offered by the branch manger, I had kept a FD in a public sector bank. Once it matured, the correct amount was transferred to my savings account. The same branch also had a FD of the company in which I work. This matured after three months but the bank deducted R18 lakh from this amount on the ground that the earlier FDR made in my personal name was wrongly given 1 per cent higher rate of interest (which they have now described as staff rate of interest). Since this fact came to their notice only now, they have adjusted it against the company FDR. How do we recover the above deduction from the bank?

Answer: The bank is guilty of unfair practice and deficient service on several counts.  First of all, in order to get the deposit, it offers a specific rate of interest. Next, it makes this late discovery that the interest offered was the staff rate of interest and it cannot pay at that rate.

So, it decides to reopen a concluded contract and change its terms. Since that is not possible - as it has already released the maturity amount - it deducts that amount from another FD in the name of a company This is totally illegal. It cannot deviate from the promised rate of interest, nor can it deduct this amount from another FD.

Write to the Nodal Officer of the bank. If he fails to restore the amount, along with interest, lodge a complaint with the Banking Ombudsman.

You also have an option of  going to the consumer court - they take much longer to decide the complaint, but in a case like this, they can also award compensation and punitive damages.

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