The District Consumer Forum in its judgment said that it is incumbent on the bank to pay interest on a deposit that has been prematurely withdrawn with an interest rate less than one per cent of the fixed rate The forum directed Canara Bank to pay interest on a fixed deposit of Rs 5 lakh.
Bank refused to pay interest on the amount withdrawn within six months while the fixed deposit was made for a period of one year.
In its order forum asserted that it is a clear a case of insufficiency on the part of the bank to refuse payment of interest. Bank has been asked to pay an interest of nine per cent on the 9 per cent (10 per cent -1per cent = 9 per cent) on the pre-mature deposit for the period it remained with them.
The bank has also been asked to pay Rs 5,500 as costs of litigation.
The complaint was filed by Ashwini Luthra, a resident of Sector 15, said after his retirement he received various benefits and deposited the amount in his bank account at the Canara Bank branch in
As he was to settle in
For this, Bank asked Ashwini to keep the aforesaid money in the fixed deposit as this would give him credit.
But the complainant then did not transfer the funds. In April 2007, when bank increased the rate of interest for senior citizens from 8 per cent to 9.5 per cent, he requested the branch in
He told that once again he was asked not to transfer the funds as his old FDs will be cancelled and converted to high rate of interest. Though this was done in April 2007, but in the third week of October 2007, the complainant needed the funds and requested the bank branch to encash one of the FDs worth Rs 5,00,000.
Then bank advised him that the FDR had to be signed by both the account holders as this was a case of “premature withdrawal”.
Hence he completed all the formalities and, the amount was credited to his account, at this he found that the interest due for this period of six months was not credited in the account.
When he inquired from the bank, he was told that since the FDR was in a scheme, which had a lock period of one year, the premature withdrawal did not entitle him to any interest.
The complainant alleged that bank had never informed this aspect either at the time of conversion of FDs at the higher rate of interest in April 2007 or when the complainant asked for premature withdrawal. Thereafter, when in spite of prolonged correspondence with the bank, nothing positive could come out, so he moved the consumer forum.
On the other hand Canara Bank, in its reply, stated that immediately after retirement the complainant did not fall within the senior citizen category to claim additional interest.
It was stated that as soon as the complainant requested the
They informed that as per the scheme, the complainant was informed that premature closure is not permissible under the terms of the deposit, therefore, the deposit be continued till its maturity.
The bank also said that they had informed the complainant in case of premature closure of the deposit, no interest would be payable for the period.
The forum on investigation found that the bank had floated the scheme for a limited period only, but at the same time bank could not put forward enough proof that for any premature withdrawal no interest is paid.
“The complainant did not receive any information from the bank that he will not be entitled to interest if he made a premature withdrawal of his FD amount. In fact, the complainant was led into a bonafide belief that he will be paid interest similarly in this deposit scheme also as used to be made in other FDR deposit schemes. However, when the complainant lodged his protest with the higher authorities, he was told that the interest was payable to him for the full amount only on the maturity date. For premature withdrawal no interest was payable,” the forum said.
No comments:
Post a Comment