SC issues notice to public sector banks, IBA | india | Hindustan Times
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SC issues notice to public sector banks, IBA

india Updated: Sep 29, 2009 23:26 IST

The Supreme Court today issued notice to all nationalised banks and the IBA on a plea, which alleged that the lenders failed to deposit the excess money they had collected from borrowers by rounding off interest rates with country's top auditor CAG as per the court order.

A bench headed by Chief Justice K G Balakrishnan issued notice to the nationalised banks and the Indian Banks Association (IBA) on a petition filed by the Association of Borrowers of Karnataka.

The banks had "charged extra" over a period of five years and eight months by rounding off interest rates on loans on the higher side by 0.25 per cent.

While deciding a PIL in 2004, the court had observed that it had directed banks to deposit excess money with the Comptroller and Auditor General of India (CAG) for the benefit of disabled persons.

The Supreme Court on April 16, 2004 directed 26 scheduled commercial banks, including the State Bank of India, to pay for a charitable cause "upwards of Rs 3,600 crore" they had collected in excess from five crore borrowers across the country.

Association of Borrowers of Karnataka had moved the Supreme Court alleging that the banks were not complying with court's orders of 2004 that asked them to deposit the money with the CAG.