Bank of Baroda fined Rs 2 lakh for hiding interest-saving scheme from Army officer

A Haryana consumer commission ordered Bank of Baroda to pay Rs 2.10 lakh to a serving Indian Army officer after finding that the bank failed to inform him about a facility that could have reduced the interest burden on his home loan. The commission held that the bank’s failure to apprise him of the facility, despite his request for information on ways to reduce his loan burden, amounted to deficiency in service.

President Nagender Singh Kadian, along with Dr Tripti Pannu and Dr Vijender Singh of the Rohtak District Consumer Commission, was hearing the complaint filed by a 51-year-old man, a serving Indian Army officer holding the rank of Brigadier, who took a home loan of Rs 42 lakh in 2012. 

“The complainant was deprived of an opportunity to take an informed financial decision regarding his existing housing loan because the relevant facility was not brought to his notice despite his stated request to the Bank officials. The deficiency on the part of the Bank has consequently caused financial prejudice as well as inconvenience and mental agony to the complainant,” the September 9 order read. 

No scheme communicated by bank

The complainant, a Brigadier in the Indian Army, along with his wife, took a housing loan of Rs 42 lakh in 2012 from the bank. The loan was disbursed in instalments and was fully disbursed by 2016.

The complainant also claimed that since he is a serving Indian Army officer, he had to remain posted at different places over the years. He added that he frequently visited the bank branch and regularly interacted with branch managers and other staff.

The complainant claimed that he regularly expressed his desire to the bank staff to be informed about schemes or options that could reduce the interest burden on his loan. He moved the commission alleging that he had suffered a loss in interest payments which could have been saved if the bank had timely informed him.

Aggrieved, he moved the commission alleging that he had suffered a huge loss in the payment of interest levied on his loan account, which could have been saved if the bank had timely informed him. 

Story continues below this ad

He added that the bank had launched the “advantage fund facility” in 2015, under which money kept in a linked savings account could provide corresponding interest relief on the principal outstanding on the home loan, but the bank allegedly did not inform him about it.

He further claimed that, as a customer, he was entitled to relevant information about facilities connected to his existing loan and that the bank failed to provide such information despite his request.

The complainant was represented by advocate Savita Dalal before the commission.

Bank’s defence 

The Bank of Baroda, through advocate Pardeep Ahlawat, submitted that new schemes were publicised through its website, social media platforms, branches and other modes. It also submitted that whenever the complainant enquired about the bank’s schemes, the information was provided to him. The bank denied that the complainant had suffered the alleged loss.

Story continues below this ad

‘Duty towards existing customers’

The commission noted that the bank had pleaded that new schemes were publicised through its website, social media platforms, branch displays and other modes. However, it held that mere general publicity of a beneficial banking facility could not completely absolve the bank of its obligation towards an existing customer who had specifically sought information on ways to reduce his interest burden.

“A consumer may not reasonably be expected to possess knowledge of every scheme, circular or facility introduced by a banking institution,” the commission observed. 

The commission clarified that the bank’s obligation was not to individually communicate every promotional offer to every customer, but to provide relevant and material information to a customer whose existing financial relationship with the bank was directly connected with the facility and who had specifically sought such information.

The commission held that the bank’s failure to apprise the complainant about the facility amounted to deficiency in service. Accordingly, it directed Bank of Baroda to pay Rs 2 lakh as lump-sum compensation, Rs 5,000 for deficiency in service and Rs 5,000 towards litigation expenses, taking the total to Rs 2.10 lakh.

Story continues below this ad

Takeaway

This ruling highlights that banks may be required to provide relevant and material information about loan-related facilities to existing customers who specifically seek information that could help reduce their interest burden.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Haryana helpline: 1800-180-2087) or dial the National Consumer Helpline at 1915 for assistance.

Don’t miss out on these stories:

Drain near senior citizen’s home remains clogged despite complaints, he wins Rs 15,000

3 years after insurer rejects fisherman’s drowning death claim, widow gets Rs 5 lakh

Story continues below this ad

Rocking chair bought for aged parents ‘develops cracks’, woman wins Rs 38,000