Andhra Pradesh - Tirupati   

Consumer forum pulls up SBI

Special Correspondent

Branch asked to pay back full amount to customer upon maturity of deposit

TIRUPATI: The District Consumer Forum has observed that banks should not commit fraud on the bona fide claims of depositors and directed the Pakala branch of the State Bank of India to pay within one month Rs.1,01,710 with 9 per cent interest from the date of maturity for a depositor's recurring deposit (RD) for Rs.18,000 for a period of 13 years. The forum also directed the bank to pay the petitioner Rs.1,000 towards costs.

The petitioner D. Nageswara Naidu opened the RD in the said branch of the bank in September 1992 under the Employees Welfare Scheme (EWS) which bore 13 per cent interest. The bank reportedly promised to pay him Rs.1,01,710 on maturity. When he approached the bank on September 11, 2006, it allegedly denied him the assured sum and informed him that it would pay him only Rs.68,000 as per the RBI instruction that the EWS scheme be treated as term deposit for a period of only 10 years to be renewed later at the prevailing rate of interest. When the depositor knocked the doors of the forum, its president G.V. Raghavulu quoting the judgements of the national and the State Commissions held that non-payment of contracted rate of interest under sections 70,72 and 73 of the Contract Act amounted to deficiency of service.

`Illegal, arbitrary'

It is virtually putting the depositor to a loss of Rs. 33,710, the forum president observed and held that banks and financial institutions should not be encouraged to adopt unfair methods to deceive the public. He further held that the action of the bank was `illegal and arbitrary' in nature which required to be visited with punitive damages besides the refund of the amount'. Other two members on the bench were T. Sujatadevi and M.S. Naidu.

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