Cheated on rate of interest? Courts to the rescue

Pushpa Girimaji

My sisters and I (all senior citizens) have savings accounts linked term deposits (sweeping/flexi FDs) at a public sector bank in Mohali. On the face of it, the multi-option scheme looks very good as it gives you the rate of interest of a fixed deposit, but with the liquidity of a savings account. However, the ground reality is that the bank often flounders in the execution of the scheme, to the detriment of the consumer. It does not diligently keep track of the changing rates of interest and the instructions of the customers. As a result, I have often caught it applying incorrect rates of interests, thereby causing financial loss to me and my sisters. Worse, it takes a lot of effort and perseverance to get the bank to admit its mistake and apply the correct rate of interest. Unfortunately, most customers of the scheme are not even aware of this as it is not easy to keep track. My complaints to the senior officials of the bank as well as the Ombudsman have not brought forth any results. What are my options now?

From what you say, the bank has failed to honour its commitment to you and probably other customers as well, on the terms of the scheme. This could either be because of the carelessness of the officials or on account of the poor quality of the application software. However, despite your complaints, the bank is not probing into the causes and taking corrective steps to eliminate such mistakes in future. This is sheer negligence and you have to hold the bank accountable.

As this is not limited to just your accounts, your best option is to bring together other affected consumers as well. Please use the social media to invite other customers of the bank who have such accounts, to join you in this fight. Remember, there is strength in numbers and your case will become much stronger when a group of consumers start voicing their protest. In fact as a group, you can all check your individual accounts to detect cases of incorrect application of interest rates and collate the data. With that kind of evidence, the group of affected customers can write to the bank’s board, with copies to the Reserve Bank of India and the finance ministry (banking division) asking for a thorough probe. You can also write to the local MPs on this.

Your demand should be for an independent audit of the scheme to (a) pinpoint the reasons for a bank’s failure to execute the scheme efficiently; (b) assess the losses caused to individual consumers; (c) determine the compensation to be paid to each of them and; (d) suggest corrective action.

However, a note of caution here: Ensure that your memorandum/complaints are brief and to the point. A lengthy, convoluted complaint can put people off the case. So first explain briefly what this scheme is all about. Do not assume that people know about it. And then make a table indicating the rate of interest on a particular date and the actual interest paid by the bank. Also indicate the instructions given by the customer and the bank’s failure to follow it. This will give at a glance, your case. 

You can also take up this issue with the consumer court, which can give suitable directions to the bank. The court can also grant exemplary damages in cases such as this. This is bound to force the customers of such schemes in other banks too to become more alert and diligent. 

Have consumer courts dealt with issues 

such as this?

I have not come across an identical issue, however, I can say that in a number of cases where banks have short-changed consumers on the rate of interest on fixed deposits, the courts have come to the rescue of consumers and directed banks to not only pay compensation, but in certain cases, even punitive damages. 

Yours is a unique case in that the bank is applying wrong interest rates, affecting consumers of the scheme as a class. And despite your complaints, the bank is not doing anything to prevent such mistakes and ensure that it does not falter on its commitment. If you provide good evidence, consumer courts will take a very serious view of such negligence.