Consumer commission fines Indian Bank for refusing credit to woman entrepreneur
“The very purpose of the launching of the scheme by Government of India was not considered by the opposite party (Bank),” the commission stated.
The Maharashtra State Consumer Disputes Redressal Commission (MSCDRC) has imposed a fine of ₹10 lakh on Indian Bank for not sanctioning a loan to a woman entrepreneur under a central credit guarantee scheme implemented through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), HT has learnt.

After hearing the complaint, the state commission held, “the very purpose of the launching of the scheme by Government of India was not considered by the opposite party (Bank). Instead, by providing small loans against the application, the opposite party followed unfair trade practice.”
“The employees of the opposite party, in the name of rules and regulations, debited certain amounts from the complainant’s account from time to time. The complainant who suffered from financial loss and irregularity passed through hardship. Thus, the schemes floated by the government, to help and promote entrepreneurship by providing adequate guarantee as well as support to new entrepreneurs, could fail due to non-application of the mind by the employees of the opposite party,” said the commission.
The Pune-based company, run by a woman and her family, on July 15, 2015, approached the Indian Bank for a loan of ₹60 lakh under the CGTMSE scheme for funding their pharma enterprise.
The complainant claimed that they came to know about the credit guarantee scheme through advertisements and after reading the advertisement about the scheme, they approached Indian Bank, one of the listed banks for implementing the scheme.
The complainant stated that the company provided all the requisite documents to the bank. However, the bank refused to grant a loan of ₹60 lakhs under the CGTMSE scheme for various reasons.
The bank quickly sanctioned a small loan on pledging gold ornaments that the complainant availed for preparing for the pharma business. The company claimed that the bank sanctioned a loan of ₹only ₹1 Lakh under a different heading, other than the one for which the loan was applied, as per the complainant.
The whole process of establishing the new pharma business could not take off and she suffered from mental agony and harassment due to the attitude of bank officers, according to the complaint.
Further, the business did not start despite all efforts, the complainant was also unable to pay back the loans availed from the bank hence the gold ornaments pledged by the company were confiscated.
The complainant first filed a complaint with District Consumer Forum but the same was dismissed, terming it frivolous. The complainant then moved the state commission in appeal. The state commission issued a notice to the bank but the bank did not appear before the commission.
The commission has also asked the bank to return ₹2 lakh collected by it under various heads from the company of the entrepreneur and also return with interest the amount of sale proceed of her ornaments, pledged with them by her company, Orasone Pharmaceuticals Pvt. Ltd. The bank had auctioned the gold ornament as the complainant failed to repay the loan amount.
The commission has also marked a copy of the order to the Prime Minister’s Office and Governor of the Reserve Bank of India for “bringing to their notice as to how the Government scheme failed due to negligence of adamant bank officials.”
