If you do not earn the returns you expect from investment made using money borrowed from a bank, you cannot hold the bank responsible, the Maharashtra State Consumer Disputes Redressal Forum has ruled.
The forum refused to grant relief to three members of a family who had made such an investment. In March 2005, Mulund resident Rahul Joshi, his wife and son had together invested Rs 10 crore in the Kisan Vikas Patra under a scheme sold to them by a direct sales agent of ICICI Bank.
The bank funded 90% of the investment while the Joshis paid the balance. The bank had advanced the funding at an annual interest of 6.75%.
The family had expected that their investment would bring them annual returns at the rate of 8.41%. Within two years of making the investment, the bank hiked the interest rate to 10.75%. The Joshis wanted the bank to revert to the earlier interest rate of 6.75% per annum for them.
When the bank refused, the family moved the consumer forum contending that it was illogical on the part of bank to continuously increase the rate of interest when the yield on the underlying security remained fixed.
They sought a compensation of Rs 15 lakh alleging that the bank had duped them by marketing a scheme in which the customer made no gains.
A bench of the forum’s president, justice SB Mhase, and member, SR Khanzode, held that the family had entered into a commercial transaction expecting lucrative returns.
“Such investment made by the complainant and his family is, certainly, a commercial activity to earn profit [and losses, if any] through a calculated risk,” the bench observed, dismissing their complaint.
The forum also noted that the bank was not at fault because the agreement between the complainants and the bank allowed the latter to hike the rate of interest charged on the funding.