EXEMPLARY CASES DEALT WITH BY BANKING OMBUDSMEN

COMPENSATION FOR CLOSURE OF SB ACCOUNT WITHOUT NOTICE

Unilateral closure of SB account:

One savings bank (SB) accountholder alleged unilateral closure of her savings bank account, without any intimation to her. The bank submitted that the inoperative account was automatically closed by levying minimum balance charges as per the bank's extant rule. However, the bank was silent on the issue of not following the prescribed procedure for closing the account.

According to its schedule of service charges, no service charge is applicable if stipulated minimum balance is maintained in the account. Otherwise, Rs 75 would be levied, and if the balance is less than Rs 75, the account is to be closed with notice/advise to the customer.

However, the account was closed by the bank unilaterally without any notice/advise to the complainant. Hence, deficiency in the services on the part of the bank was clearly established.

The bank had violated its own policy, the RBI guidelines and Para 2 of BCSBI Code of Bank's Key Commitments to Customers causing inconvenience to the complainant. In view of the observations, the bank was directed to pay a token compensation of Rs 500.

Change in the contracted rate of interest on fixed deposit:

The complainant had deposited Rs 30,000 with a bank as fixed deposit for a period of 120 months at an interest rate of 11 per cent a year. As per the Fixed Deposit Receipt given to him, the maturity value was Rs 88,796. After the maturity period, when the complainant went to collect the maturity value against the receipt, he was told that the rate of interest mentioned in the Deposit Receipt was wrong and in place of 11 per cent, the rate of interest would be 10 per cent, and accordingly, the maturity value would be about Rs 80,000 against the maturity value Rs 88,796 mentioned in the receipt.

The bank submitted that the deposit was made on April 4, 2000, for 10 years and while issuing the deposit receipt, the branch, by mistake, mentioned the interest rate to be 11 per cent. However, the HO of the bank reduced the rate of interest on the deposit on the same day, that is, on April 4, 2000, to 10 per cent and the same might have been received by the branch afterwards.

The Ombudsman observed that the revision of interest rate was done post facto and that too without informing the depositor and this was not correct. Subsequently, the bank agreed to pay interest on the deposit as per the receipt issued to depositor.

(Source: Annual Report of the Banking Ombudsman Scheme.)

This is fifth in the series on redressal of customer grievances by the Banking Ombudsman being carried in these columns.