Observing that procedural safeguards intended to protect financial institutions cannot be converted into instruments of harassment against genuine legal heirs, the Commission directed the bank to pay compensation and costs to the complainant and issued directions aimed at making banking procedures more accessible through regional-language communication.

Facts

The complainant, Govindan, an 83-year-old farmer, approached the Bank of India, Kuruppampady Branch, seeking release of ₹62,541 lying in the savings account of his deceased wife, Radha Govindan. The nominee in the account, their son, had predeceased the account holder.

According to the complainant, after his wife's death, he approached the bank with the death certificate and relationship certificate. The bank, however, insisted on the production of a legal-heirship certificate. He subsequently obtained and submitted a Certificate of Administration.

Despite furnishing the required documents, the complainant alleged that the bank continued to delay settlement of the claim, citing the need for legal opinion and additional formalities. The amount was ultimately released only after repeated visits and representations made by him.

Aggrieved by the delay and hardship caused, the complainant approached the Consumer Commission seeking redressal.

Contentions Of The Bank

The bank contended that there was no deficiency in service on its part. It argued that when the complainant initially approached the branch in May 2023, the application submitted by him was unsigned and was not accompanied by the necessary legal-heirship documents. According to the bank, the Certificate of Administration was produced only later and complete documentation was furnished on 1 September 2023, whereupon the amount was transferred without delay.

The bank maintained that any delay was attributable solely to the complainant's failure to submit the requisite documents.

Observations

The Commission observed that while banks are entitled to verify the entitlement of legal heirs claiming funds of a deceased depositor, such verification cannot become an opaque or unnecessarily burdensome process. It held that banks must clearly communicate procedural requirements and facilitate settlement of claims within a reasonable time.

Rejecting the bank's defence that the delay was caused by an unsigned application, the Commission noted that the bank failed to produce the alleged application or any contemporaneous records supporting its claim. It therefore held that the bank had not established that the delay was attributable to the complainant.

The Commission further observed that the complainant, an elderly person unfamiliar with English, was entitled to meaningful assistance. Referring to RBI guidelines, it held that procedural requirements should be explained in a language understood by the claimant and that claim forms should be made available in the regional language.

Noting that the complainant was compelled to make repeated visits and representations despite there being no competing claim, the Commission held that the bank had failed to provide the transparency, diligence and customer-friendly assistance expected of a regulated banking institution. The Commission also faulted the Zonal Manager for failing to respond effectively to the complainant's representation, holding that such inaction formed part of the deficiency in service.

Reiterating that procedural safeguards intended to protect financial institutions cannot be converted into instruments of harassment of genuine legal heirs, the Commission concluded that the bank's conduct amounted to deficiency in service and unfair trade practice.

Decision

Partly allowing the complaint, the Commission directed the bank to pay ₹10,000 as compensation for deficiency in service, unfair trade practice, inconvenience and mental agony caused to the complainant, along with ₹5,000 towards litigation costs. The amounts were directed to be paid within 45 days, failing which they would carry interest at 9% per annum from the date of filing of the complaint until realization.

The Commission also directed the bank to ensure that claim forms, checklists and procedural requirements relating to deceased-depositor claims are supplied and clearly explained in the concerned regional language. It further directed that customers be given the option of receiving SMS alerts and other electronic communications in the regional language. A copy of the order was directed to be forwarded to the concerned Regional Office of the Reserve Bank of India for appropriate consideration.

Case Title: Govindan v. Manager, Bank of India, Kuruppampady Branch & Anr.

Case No.: CC No. 867 of 2023

Counsel for the Complainant: Adv. Kiran Peter Kuriakose

Counsel for the Opposite Parties: Adv. P. Fazil, Adv. Saju Thaliath and Adv. Jayasree Manoj.

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